Kimberley has a Lloyds current account, a mortgage with GE Money, Hargreaves Lansdown, savings in a Santander ISA, car and home insurance with Hastings, life insurance with Aviva, an Amex gold card and a loan from Zopa.
Here’s what Olivia Bowen, our good-with-money.com expert ethical IFA, had to say about how she can make her finances better:
“Ethical banks and building societies used to offer rates typically lower than conventional banks and building societies, however in recent years this is no longer the case and many offer exceptional customer service and some headline savings rates. It would be good to move current account from Lloyds, which has no ethical policy.
Despite the Co-operative Bank’s recent well-documented troubles, we are not currently recommending that clients automatically transfer their money away, as any funds you may hold with The Co-op will be protected by the Financial Services Compensation Scheme, up to £85,000 (reducing to £75,000 next year). Its savings rates are, in general, pretty low, but they are the only ethical bank to offer current accounts and an efficient online service. For more information see: www.theco-operativebank.co.uk or www.smile.co.uk for their on-line banking arm.
Beyond the Co-op, we suggest Mutual organisations such as building societies, where customers are “members” with a democratic right to have a say in the management and policy.
We consider them to be “ethically neutral” as although most are not proactively involved in the advancement of social and environmental factors, they are less likely than the big banks to be involved in business practices that conflict strongly with your values.
For example, Nationwide is the largest mutual and savings provider in the UK and one of the three biggest mortgages lenders. It considers itself to have a social mission and prides itself on responsible lending, and offering customers better rates than its Plc rivals. Norwich & Peterborough were one of the first mainstream lenders to offer a “Green” mortgage package.
Regarding your pensions, you should have a good choice of ethical funds from Hargreaves Lansdown, and you may wish to move some of your Cash ISA money into an Investment ISA, depending on your risk profile, and whether you wish to invest for more than five years.
Top-performing Ethical funds over the last 12 months, also with their 5 year performance
Cumulative performance
| Fund | 1yr | 5yr |
| Standard Life Investments UK Ethical Ret | 12.9 | 81.8 |
| Alliance Trust UK Ethical A Acc | 11.5 | 62.7 |
| Alliance Trust Sustainable Future UK Growth 1 Acc | 11.5 | 61.1 |
| Kames Ethical Equity A Acc | 9.1 | 73.2 |
| F&C Responsible UK Income 1 Acc | 8.3 | 63.0 |
| FTSE All Share TR in GB | -3.83 | 43.54 |
Information provided by www.castlefield.com Source: Fe analytics. As at 25-9-2015
Top-performing Ethical funds in terms of their 5 year performance history
Cumulative performance
| Fund | 1yr | 5yr |
| Premier Ethical A Inc | 7.6 | 85.7 |
| Standard Life Investments UK Ethical Ret | 12.9 | 81.8 |
| Henderson Global Care UK Income A Inc | 7.5 | 77.4 |
| Royal London Sustainable Leaders Trust C Acc | 7.9 | 76.6 |
| Kames Ethical Equity A Acc | 9.1 | 73.2 |
| FTSE All Share TR in GB | -3.83 | 43.54 |
Information provided by www.castlefield.com Source: FE Analytics. As at 25-9-2015
We can see from this that Standard Life and Kames’ funds have been top-performers not only over the last 12 months, but also the last 5 years demonstrating consistent performance for investors.
For your mortgage, again you could look to the mutuals, to support businesses that are more ethically structured. If your home has any environmental features, you could approach Ecology Building society.
Aviva no longer offer ethical funds, but is the largest insurance company in the UK and is part of Aviva plc, the world’s sixth largest insurer with 34 million customers worldwide, with over 300 years of heritage.
Aviva Plc is in the top 10% of socially responsible companies globally in the Dow Jones Sustainability World Index. In 2012 they invested £5.7 million into their UK communities. One in three of their employees were involved in community investment activities which included giving nearly 30,000 hours. {Source: Aviva 2014}
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