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Ethical Income Fund ISAs

Invest for income, in line with your principles
Ethical income funds provide a way for you to ensure your money is invested in line with your principles, while optimising their chances of receiving income.
Selected ISAs

Stocks & Shares ISA

from Prudential

Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Four unique PruFunds
  • Invest From: £50 p.m. or £500 lump sum
  • Investment Options: Lump sums, regular savings and ISA transfers

Why we like it: Choose from 4 unique PruFund Funds, each one with a different level of risk and managed by Prudential’s in-house experts, and you can keep track of your investments 24/7 using their online valuation service. Open with as little as £50 per month or a one off lump sum of £500. The application process takes around 10 minutes and they also have a simple transfer process if you already have ISAs that you wish to move across. Other benefits include one simple annual management charge and no exit fee.

Stocks & Shares ISA

from Virgin Money

ISA Option
Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: Choice of six funds
  • Invest From: £1
  • Investment Options: Lump sums, regular savings and ISA transfers

Why we like it: Choice of five passively managed Funds give you easy access to different levels of risk and return. No need to spend time managing individual investments, it’s all done for you. Virgin Money’s passively managed Funds have an annual ongoing charge of 1%. Virgin Money also offers the Climate Change Fund. This only invests your money in hand-picked companies with strong environmental credentials. As it is more expensive to run, this Fund has a higher annual ongoing charge of 1.3%.
Remember, you may get back less than you invest. 

Investment Income Plan ISAs

FTSE 100 Enhanced Income Plan

from Investec

Allow ISA Transfers
Annual Income 4.35% fixed income
  • Counterparty: Investec Bank plc
  • Term: 5 years

Why we like it: Fixed income, fixed term, monthly payments and your capital back unless the FTSE falls by more than 50%. By offering a high fixed income rather than a variable income based on the performance of the stock market, this plans offers something different to income seekers.

  • 4.35% income paid regardless of the performance of the FTSE 100
  • Monthly income
  • Available for ISA, ISA transfer and direct investment
  • Capital is at risk if the FTSE 100 Index has fallen by more than 40% at maturity from it's initial level, in which case your initial investment will reduce by 1% for each 1% fall
  • Minimum investment £3,000
  • An arrangement fee applies for this plan
  • Product designed to be held for the full term

Important Information: Structured investment plans are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the underlying investment. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.

FTSE Monthly Contingent Income Plan

from Meteor

Allow ISA Transfers
Annual Income Up to 8.04%
  • Counterparty: Natixis
  • Term: Up to 10 Years
  • Potential monthly income: 0.67% (equivalent to 8.04% annually)
  • Income paid even if FTSE 100 falls by 15%
  • Potential to kick out quarterly from year 2 onwards
  • Available for ISA, ISA transfers and direct investments
  • Capital is at risk if the FTSE 100 Index falls by more than 40% during the term and finishes lower than its starting value, in which case your initial investment will reduce by 1% for each 1% fall
  • Minimum investment £5000
  • An arrangement fee applies to this plan
  • Product designed to be held for the full term

Important Information: Structured investment plans are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the underlying investment. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.

FTSE 100 Defensive Income Plan

from Investec

Allow ISA Transfers
Annual Income up to 8.00%
  • Counterparty: Investec Bank
  • Term: Maximum 8 years
  • Up to 8% per year based on the performance of the FTSE 100 Index
  • Income paid even if Index falls by 20%
  • Quarterly payments
  • Capital is at risk if the FTSE 100 Index has fallen by more than 40% at maturity from it's initial level, in which case your initial investment will reduce by 1% for each 1% fall
  • Minimum investment £3,000
  • An arrangement fee applies for this plan
  • Product designed to be held for the full term

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

Important Information: Structured investment plans are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the underlying investment. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.

FTSE Daily Accrual Income Kick Out Plan

from Mariana

Allow ISA Transfers
Annual Income Up to 6.60%
  • Counterparty: Natixis
  • Term: Maximum 10 years
  • Income paid even if FTSE 100 falls by up to 25%
  • Income accrued daily
  • Quarterly payments
  • Plan has the potential to kick out early every year from the end of year 3 onwards
  • Minimum investment £10,000
  • An arrangement fee applies to this plan
  • Product designed to be held for the full term

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

Important Information: Structured investment plans are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the underlying investment. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.

Investment Growth Plan ISAs

FTSE 100 Enhanced Kick Out Plan

from Investec

Allow ISA Transfers
Maximum Potential Return 9.65% per annum
  • Counterparty: Investec Bank plc
  • Term: Up to 6 years

Why we like it: Kick out plans seem to attract particular interest when the market is at historically high levels since they can provide competitive returns even if the FTSE stays relatively flat with the potential for 10% annual growth.

  • 9.65% for each year (not compounded) provided the FTSE 100 finishes higher than its starting value (subject to averaging)
  • Potential to mature early, from year 1 onwards
  • Available for ISA, ISA transfer and direct investment
  • Capital is at risk if the FTSE 100 Index has fallen by more than 40% at maturity from it's initial level, in which case your initial investment will reduce by 1% for each 1% fall
  • Minimum investment £3,000
  • Product designed to be held for the full term

Important Information: Structured investment plans are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the underlying investment. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.

Investment Fund Supermarket ISAs

Stocks & Shares ISA

from Charles Stanley

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: 1,500+ funds
  • Invest From: £50 per month or £500 single

Why we like it: Invest through an award winning FTSE company, with extensive research and analysis and competitive charges. Choose from a range of investments including shares, funds, gilts, bonds, investment trusts and ETFs.

Share Dealing ISAs

Vantage Stocks & Shares ISA

from Hargreaves Lansdown

  • Trade From (frequent trader rate): £5.95
  • Trade From (standard trader rate): £11.95

Why we like it: Online trading charges based on previous month's activity. 20+ trades made in previous month is £5.95 a trade. 10-19 trades are £8.95 a trade. Less than 10 trades it’s £11.95.

Peer to Peer Lending ISAs

Peer to Peer Growth IFISA

from Lending Crowd

ISA Option
Allows ISA Transfers
Interest Rate 6.00% target return
  • Term: No Fixed Term
  • Invest From: £1000

Why we like it: Innovative Finance ISAs (IFISA) are the new way to invest tax-free. Just like Cash and Stocks & Shares ISAs, you can invest up to £20,000 each tax year, and you don’t need to pay any personal taxes on your earnings. Lending Crowd will automatically diversify your funds across at least 20 loans through their Loan Market, with no more than 5% of your funds invested in any one loan. All repayments will be automatically reinvested.

  • No income tax or capital gains tax to pay on your profits
  • No fixed term, hold for as long as you wish
  • Also accepts ISA transfers from previous year's ISA's
  • Investments are automatically diversified across multiple business loans
  • The target rate is variable, net of ongoing management fees, estimated bad debt and before the 1% withdrawal fee
  • Capital is at risk
  • Must be aged 18 or older
  • Peer to peer lending is not covered by the FSCS

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)
Selected ISAs

My Select ISA

from Scottish Friendly

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choice of Scottish Friendly Funds
  • Invest From: £10 per month

Why we like it: Invest from only £10 a month, lump sums from just £100 or a combination of both using your tax-free Investment ISA allowance. Once you have set up My Select (ISA), you can stop, restart, raise or lower your payments or your investments and cash in whenever you want. Your money will be invested in a My Select policy within a Scottish Friendly ISA which will then invest in a choice of funds from Scottish Friendly including stock market and bond funds.

Ethical Income Fund ISAs

Ethical investment funds have become increasingly popular, partly due to growing public awareness of issues such as climate change and human rights, and also because investors are attracted by the potential returns available. Ethical investments could be a valuable addition to your financial strategy because they allow you to shelter any potential returns from tax, diversify your portfolio, and know that you are helping to make the world a better place.

Ethical income fund ISAs invest in companies that are deemed to be socially responsible, in terms of human rights and environmental impact. If you are an income seeker, you can opt for ethical funds that offer monthly, quarterly or twice-yearly income.

What constitutes 'ethical' varies from investor to investor depending on their personal values, so it's best to discuss your specific priorities with your chosen ISA manager before investing.

Benefits of an ethical income fund ISA:

  • By using your ISA allowance in this way, you can be sure that your money only goes towards causes that tie in with your personal values.
  • Companies which have a good ethics track record are less likely to become the subject of dispute or legal action - both of which could have a negative effect on share prices.
  • An ethical income fund ISA allows you to diversify your investment portfolio into new, sustainable markets.
  • By using your ISA allowance to invest in ethical income fund ISAs, you can benefit from tax-efficient income. You can invest up to the maximum ISA allowance into an income fund isa, click here to check the current limit. 

How do I choose an ethical income fund ISA?

It can be tricky for individual investors to judge whether a particular company is operating ethically or not, so most investments of this type are made though a specialist ethical fund manager. An ethical fund manager will thoroughly research potential investment targets, ensuring that they meet certain criteria. Often, ethical fund managers will assess companies on both positive and negative criteria. The different approaches of ethical investment funds are often described as:

  • Light green - this approach avoids investments that have a negative impact. For example, they may avoid companies involved in weapons manufacture, human rights breaches, or animal testing.
  • Dark green - this approach involves actively seeking to invest in companies that are making a positive contribution to the environment and society, such as companies in the renewable energy sector
Important Risk Information:

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.

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Stocks and Shares ISAs

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