GOOD Money Week is the new name for National Ethical Investment
Week. This year, it runs from 19 to 25 October.
Good Money Week seeks to mobilise financial advisers, fund
managers, charities, faith groups, and a wide variety of financial
organisations to raise awareness during the week of the small but
growing sustainable-finance sector in the UK.
Its organisers are also raising a petition to the Government to
be more open about how our taxes are being spent to create a
healthier, happier society, and to protect the environment.
Lisa Stonestreet, who is managing Good Money Week for the UK
Sustainable Investment and Finance Association (UKSIF), says that
the term "ethical investment" is often understood too narrowly, as
largely a matter of refusing to invest in "sin stocks" such as
alcohol or the arms industry; and it may also put off people who
think that invest- ment is just for wealthy people with
The message of Good Money Week, however, is that anyone who uses
financial products, from a current account to a pension fund,
should think about what his or her money might be used for by the
people it is deposited with. The website quotes Archbishop Desmond
Tutu: "It makes no sense to invest in companies that undermine our
Ms Stonestreet explains: "We want everyone to be thinking about
the social and environmental impact of their choices, whether they
are high-net-worth or not.
"'Good money' is anything that takes such impacts into account.
'Good money' reflects our values, enhances quality of life,
safeguards the environment, and protects future generations. We're
not talking about one particular strategy, but more of a philosophy
- and we want people to feel engaged and empowered by this
The week has become an annual fixture since it was launched in
2008. "One of our overarching aims is that there should be more
demand for sustainable investment and finance, and we'd like to
think we have helped to achieve that," Ms Stonestreet says.
"Not least, we have seen many more churches talking about this
issue, using our resources, and presenting faith-orientated events,
and that's been really encouraging.
"Where we haven't had so much success is in creating mass
awareness, and so this year we're focusing on making things both
more accessible and more inclusive. In particular, we are targeting
students, in the hope that if we can reach people who are just
about to enter the workplace, and can get them thinking about
sustainability, they will carry on doing so for the rest of their
Mel, 34, wants to think more ethically about her
finances. Two independent financial advisers consider her banking,
saving and investment options
MEL, aged 34, a deputy head teacher, has been thinking about
banking more ethically for a while, but has felt hampered by a lack
of knowledge, and time to research what is available. "I've been
trying not to think about issues like ethical finance," she says.
"It's because I don't understand finance in general. I get letters,
and they go straight in a file; I never look at them again."
Mel has a personal account with NatWest, which she admits is
purely because of convenience: "I've had that account since I was
about ten." She also has a Halifax joint account with her partner,
Besides savings in NatWest, Mel saves £1000 a month with
Halifax, and is interested in what ethical funds, bonds, stocks,
etc. might yield a better return. Her savings with NatWest are
"online; so I can transfer it quickly, but it's paying no interest
whatsoever". She also has Premium Bonds.
Mel and Andy have a four-year-old daughter - one of the last to
be given a Child Trust Fund. "Is it possible to opt out of a CTF
and go for a children's ISA instead, as these seem more
competitive?" she asks. What ethical savings accounts exist if it
is preferable to pay into something else? She has bought Premium
Bonds for her daughter, as she was bought hers as a child.
"I would also like to know whether it would be financially
better to opt out of my teacher's pension; and, if so, how to save
that money more ethically. We are particularly keen on green
Savings account: NatWest, balance
Mortgage: Nationwide, £183,000 owed, 31 years
remaining, paying £817 a month.
Instant savers account: Halifax: for paying in
£1000 a month, she gets £5 a month.
Premium bonds: £1500.
Pension: Teacher's pension (opt-out
Martin Andrews, AW Financial Management LLP,
You could consider Kingdom Bank for savings, and Reliance Bank
for a current account. Both provide online access, and profits are
used to fund Christian initiatives in various ways.
Reliance also provide some basic mortgage products, but options
are limited. I favour offset mortgages; but, to my knowledge, there
are none available from any ethical or Christian banks or lenders.
To this extent, you have to consider trading the suitability of a
product for the additional benefits to your wider financial
planning when making ethical decisions.
With an offset mortgage, you can over-pay on a monthly basis,
reducing the mortgage balance and interest payments quicker. If you
need funds for a specific task, you can access some of the
overpayments back. Furthermore, the interest you are likely to get
on any savings is likely to be less than the offset mortgage
interest you will save on any credit balances.
You could offset the £8000 in your current account; possibly the
£1000 per month saving, too. There is real benefit in reducing your
mortgage while interest rates are low, rather than investing in
ethical funds. Or you may prefer to invest £500 per month, and use
£500 per month to overpay your mortgage.
If you have specific issues that you want to support or avoid,
the website www.yourethicalmoney.org provides information on the
ethical stance of different products and funds. There is a
difference between exclusion on ethical grounds, and engagement on
ethical grounds. You would need to decide which option best suits
From April 2015, you should be able to transfer your daughter's
Child Trust Fund into a Junior ISA, and there will certainly be
ethical option(s) available nearer the time.
It would not be prudent to opt out of the teacher's pension
scheme because your employer will more than double the contribution
you make into the scheme. You could make additional contributions
into another pension scheme, as long as the total contribution on
your behalf does not exceed the £40,000 per annum annual
Martin Andrews, of AW Financial Management LLP, has been
recommending ethical investment portfolios for clients for more
than ten years. He is also executive chairman of the Association of
Christian Financial Advisers.
John Ditchfield, of Barchester Green Investment
You should certainly remain in the teacher's pension scheme: the
current employer contribution is 14.1 per cent, making this a
good-quality pension scheme. If you maintain contributions between
now and retirement, this scheme should provide a good retirement
income, plus lump-sum benefits, in addition to important
"insurance-based benefits" at three times your annual salary.
You should instead focus on building up a cash emergency fund,
and reducing your mortgage debt - these are priorities, ahead of
investments into funds or other assets. Ideally, an emergency fund
should be equal to six months of your annual net earnings.
Premium Bonds are quite complex products, with the returns
determined at random. I would, therefore, recommend either a simple
cash-based account - Santander 123 account offers three per cent on
balances over £3000 - or a good cash ISA (there are plenty
advertised online). The general rule of thumb is that an online
account will offer the best terms over time.
I agree that a Junior ISA would be a better option than the CTF,
but the rules prevent a child from having both. You might consider
an Open Ended Investment Company (OEIC) designated in favour of
your daughter, however, as this could be transferred to a JISA once
the rules eventually change (expected in April 2015).
In terms of moving to an ethical bank, Co-op, Triodos, or
perhaps a building society such as Nationwide would probably be the
most practical solutions.
John Ditchfield is a director of Barchester Green
Investment, the largest and longest-established specialist in
responsible investment in the UK, with a 20-year track-record of
financial planning for individuals, charities, and businesses,
including WWF-UK and Greenpeace.
The details given above are for information purposes, and
must not be considered advice.