ethical isa & temporary tax savings...

barneybry

Hi everyone, I'm new.
Can anyone please help me with a couple of questions??:

Firstly, I've been looking into moving my isa (Intel Finance 5.35%). I would like to find an 'ethical' option which pays a half decent rate. So far the best I can find is co-operative at 5.12%.

I'm not sure I want to risk a Stocks&Shares isa, as the money invested is to pay tax on my freelance earnings at the end of each year (put aside each month throughout the year).

Alternatively, is there a smarter way to make use of this temporary 'waiting' money?
ie, could I overpay the mortgage with, say, half the amount, then start taking payment holidays nearer the time I need to pay tax (to allow me to save up enough money again in time for the payment deadline?)
- Of course the danger would be that I could have a slow period of work and not be able to save up enough again to pay the tax with.

I currently have around 7 or 8 thousand in my isa, which I believe I will need in July (or possibly half the amount? need to check with accountant).

I am not particularly concerned about fractions of interest rates, as the profit on 7,000 at 5% would be 350 pounds p.a., and 1% difference would only be 70 pounds (which is not worth losing sleep over!)

Can anyone think of a more effective way to use this 'limbo lucre'?

Thanks in advance, Barney.

caliston

'Ethical' is a very broad term, and there are lots of people jumping on that bandwagon. What do you mean, exactly?

I know you're not investing, but when investing there are roughly two types of ethicality:

One is not investing in things that are 'bad': alcohol, tobacco, armaments, oppressive regimes, animal testing, nuclear power, etc. That means that companies like Tesco are OK because they're not bad under these standards.

The other is investing in things that are 'good': climate change, organic food, Fairtrade, public transport etc.

Another way is to actively invest in companies doing some 'bad' things and use shareholder votes to try to change them.

The ethical investments market is quite small (unless you're willing to buy shares directly) and there's an awful lot of hype. Unless you fully manage the investment yourself you'll probably have to make some compromises: everyone's definition of 'ethical' is different.

The ethical banking market is even smaller. A few other players are Smile (Co-op internet arm), Triodos and Ecology building society. Rates aren't great. I think the Co-op is mostly about not being 'bad', though there are some positive actions there too.

So it depends what your views are. Another way to look at it is this. Lots of banks and building societies need cash for mortgages at the moment. This cash is being invested straight into UK housing. If lending someone money to buy a house is ethical in your view, then you could look at accounts at major mortgage lenders. Have a look at their annual report to see how much of their deposits go towards mortgages. Smaller building societies in particular don't do much except lend on property so you can fairly confident your money is going into property not arms dealing. No guarantees, though.

munk

I've got a mate who has a Triodos Cash ISA who rates it highly. Not spectacular interest but it does have a solid ethical policy. Site says it all really:

http://www.triodos.co.uk/

Hungerdunger

I've always felt that Building Societies are mildly ethical - in theory I'm investing my money in them to provide loans for other individuals to buy houses; no shareholders to worry about and (hopefully) no investments by them in unethical companies.

Or am I being naive?

ukdutypaid

Got to be the Tridos one. They're a big name in this sort of thing....

The Coop is bad enough for access, but Tridos, if only it had more exposure and access.
They are about as hardcore as you can get though. Everything about them screams ethical....

Just take a gorp round their site.. I've toyed with them for years but plumped for an Ethical S&S ISA from L&G in the end....
Tridos's rates for Savings accounts are just well frankly rubbish... What price saving the earth I suppose...

They're actually Dutch from what I know, but I wouldn't let that worry you....

notis7

I was always under the impression that IF's parent company always looked at ethical investments....Are you sure that IF are not - their rate is not that bad either!

barneybry

Thanks all for the great advice, I do like the look of Triodos, it does look the best ethically, and most honest and upfront about who they invest in. I need to read up on their history a bit more first I think.
I WAS leaning more towards co-op, as they already have a solid reputation (I've actually heard of them!!), but I can't find much about who exactly they invest in.
Back to Google one last time!

[Deleted User]

barneybry wrote: »

Thanks all for the great advice, I do like the look of Triodos, it does look the best ethically, and most honest and upfront about who they invest in. I need to read up on their history a bit more first I think.
I WAS leaning more towards co-op, as they already have a solid reputation (I've actually heard of them!!), but I can't find much about who exactly they invest in.
Back to Google one last time!

Not sure if it is what you are looking for, but if you go here then you will see the voting records of the Investment Arm of the co-op back to 2002 in the UK and 2004 overseas.

King_Weasel

Maybe the Ecology Building Society could meet your needs.

Never used them myself.

munk

barneybry wrote: »

I WAS leaning more towards co-op, as they already have a solid reputation (I've actually heard of them!!), but I can't find much about who exactly they invest in.

I've had dealings myself with CIS/coop and know a few others who've gone with them too - whether for ethical reasons or not. My opinion of them is that they're a bit too keen to make a buck on initial commission by using salespeople to give it the hard sell ... I hesitate to use the word 'hard' here because all banks etc do use salespeople and end of day coop are a bank... but still, the commission they make off you is pretty high (I'm talking about Unit trusts here though which may not be what you're after).

Of course what should they do though - forego their commission and give it all to charity?! Well I don't know, probably not... just my personal opinion though, they do seem to be quite a commercial enterprise and along with that comes some of the dodginess that 'commerce' involves.

On the other hand though the original Co-op ethos of being a 'cooperative' where local communities came together to share their produce locally is quite good. They still have that kind of ethos to some extent in as much as you can sign up to be a member and vote on various issues and take a share of any profits they make etc etc (similar to building societies). Swings and roundabouts :rolleyes: