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9th
Sep 2020
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Why Should I Consider an Ethical Investment ISA?

Why Should I Consider an Ethical Investment ISA?

Lots of people opt for an Ethical ISA to “put their money where their mouth is”, because it allows you to invest in line with specific values you might hold. If you do hold strong beliefs on specific issues – for example, the environment – then you should consider opening an Ethical ISA. So what exactly is an Ethical ISA, and how do they work? We’ve broken it down for you. 

What is An Ethical Investment ISA?

An Ethical ISA is a type of ISA which allows you to simultaneously invest your money in funds which align with your own personal values whilst enjoying the tax-free return benefits associated with an ISA account.

The accounts will only invest in funds which are socially responsible – i.e. they will exclude investment funds which are associated with certain investment opportunities or industries.

How are they “Ethical”?

Ethical Investment ISAs are accounts which specifically invest your money in socially responsible stocks and shares.

Depending on the provider you choose for your Ethical Investment ISA, the following industries will generally be excluded from investment opportunities:

  • Tobacco
  • Alcohol
  • Pornography
  • Gambling
  • Fur trade
  • Armaments
  • Oil companies
  • Mining companies
  • Fire arms manufacturers

Why should I Consider an Ethical ISA?

You should consider an Ethical ISA if you are looking to ensure that your investments are aligned with your personal values. 

Other Ethical investment options are available, however by using your ISA allowance you will be able to enjoy your returns being kept safe from the tax man.

As with most other types of ISAs, you can invest up to £20,000 per year into an Ethical Investment ISA without having to pay income tax or capital gains tax on the returns from those investments.

So if you’re a bit more conscious of the social impact of your investments, this is a great way to make sure you are comfortable with where your money is going while still making good returns and taking advantage of your ISA allowance.

Where should I look for one? 

Lots of different providers offer an Ethical ISA option - so it's important to shop around to make sure you know where you're putting your money, and to make sure you're getting the best deal which works for you. 

Our Ethical Investment ISA page compares all the latest rates and look at all the options available to you. 

Read more about Ethical ISA options

Investment Fund ISAs

Ethical Trust Income

from Legal & General

Income Yield 3.90% pa - Interest Paid Bi-annually*

Why we like it: A low cost ethical fund (0.25% pa ongoing charge) with the objective of the Fund is to provide growth by tracking the performance of the FTSE 350 Index (the “Index”), excluding shares of companies whose business does not meet a range of ethical and environmental guidelines (“ethical screening methodology”) determined by an external agency chosen by the Manager. This fund is available through the Hargreaves Lansdown Platform.

*Historic yield correct as at 22/5/2020

Important information: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

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