Ethical Junior ISA

Ethical Junior ISA

An ethical ISA is an ISA where your money is used to invest in green, eco-friendly and ethical funds. You can invest ethically and still make money. Ethical ISAs allow you to invest in a socially responsible manner and have more say about where your money is invested. 

Currently, more and more people want more control over where and how their money is invested.

If you would like your child’s money to be invested ethically, there are now several providers who can offer this option. For example: One Family.

Ethical ISA funds are used to invest in unit trusts, gilts, the stock exchange, life assurance and many other similar ventures. They are most suitable for people who are willing to leave funds in their ISA for long periods such as five years. They are also good for people who are willing to withstand a bit more fluctuation in the value of their fund.

What Funds are Likely to be Excluded in an Ethical ISA?

While this varies from provider to provider and some are more ruthless than other, generally the following are excluded, funds derived from:

• Tobacco
• Alcohol
• Pornography
• Gambling
• Fur trade
• Armaments

Some also exclude:

• Oil and mining companies due to environmental concerns and human rights abuse

Some companies don’t necessarily exclude all funds associated with these industries but instead look at each fund individually and assess the track record of that particular company in terms of their human rights or green issues.

Ethical ISA Review

OneFamily offer an Ethical Isa for children. They are a financial services provider based in Brighton, Sussex. It is a mutual society and as such has no shareholders, and is instead owned by its two million members. It is a merger between Engage Mutual and Family Investments.

Features:

Ethical Junior ISA – This option will only invest in shares of companies with a responsible outlook on social, ethical and environmental issues. It also mostly invests in UK shares.

Useful to Know

Your child will only be able to access the money at the age of 18 but will then assume full control. If you worry about your child having total access to the money then it could be between to open a savings account in your name, although this would mean losing the tax-free wrapper.

• There is an annual management charge per year on these accounts
• Check the provider's policy for what they class as ethical to make sure it matches your needs
• You are able to transfer in to this account as long as the amount is £500 or more
• You can also transfer to another provider at any time
• You can’t open a Junior ISA if you already have a Child Trust Fund but you can transfer your child’s Trust Fund in to a Junior ISA
• As these are Investment ISAs, it is possible that you could lose money but as this is a long term investment, the risk is minimal