Ethical Savings – What are the options

When you choose to invest your money, there are four main types of investment to choose from:

– Stocks and shares, where you buy a stake in a company

– Bonds, where you loan your money to a company or government

– Cash Savings, where you deposit your money in a savings account

– Property, where you invest in a commercial building, such as warehousing.

When you choose ethical savings or investment, you have much greater control over the companies you want to help. Individually, we have our own views on what is ethical. So, when it comes to saving or investing ethically, research the banks, companies or investment funds to check that their ethical values are a good match for your own.

Ethical savings typically use business models designed to have no negative impact on humanity or the environment. Almost all steer clear of industrial sectors, such as tobacco, fossil fuels or weapons manufacturer. Some go further by explicitly targeting the renewable energies sector.

So how can your money to make a difference? 

Most investment firms do not make ethical choices when choosing the companies to invest in; decisions are based on profit alone. However, there are options available for all four investments types that weigh profit against ethical, environmental and socially conscious values.

In today’s blog, we will provide a brief overview of the investment options using these values.

Junior ISAs 

Junior ISAs (JISAs) can be invested in either Cash or Stocks and Shares and are an excellent way for parents or grandparents to give their kids or grandchildren a head start in life.

Ethical investment ISAs 

ISAs are probably one of the most popular types of investments, as they provide a right balance of risk and reward whatever your attitude to risk. Intended for either lump sum or regular investments, they can run on an open term, with bonuses typically added annually or will be invested in funds and are tax-free on maturity.

Investment Bonds 

Whether choosing stocks and shares, corporate or government bonds or property, investment bonds offer exposure to growth without some of the volatility of the stock market. As there is no age restriction, they are an equally good investment type for children and can be written in a variety of trusts, in the event of death. It is also possible to take an annual income, without any tax implications.

Regular Savings Life Assurance Savings 

These plans offer a guaranteed return on maturity, provided premiums are up to date. These types of plans are often chosen by individuals who want to save a regular amount each month for their children, to mature on either the child’s 18th or 21st birthday.

The Financial Services Compensation Scheme covers all of these options to varying amounts of, at least, £85,000.

When making decisions involving large sums of money, getting professional advice is universally recommended.

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