Best ethical selections for your 2020/21 ISA
The 2020/21 ISA deadline - 5 April - is fast approaching. If you can, you should make sure you take advantage of the tax benefits that ISAs have, and maximise your contribution.
You can invest a maximum of £20,000 across your ISAs in the 2020/21 tax year - and that can be split across each type of ISA you may have open. In addition, you can also contribute £9,000 to each of your children's Junior ISAs.
Below we give a quick overview of the ethical options for your ISA before the deadline hits! You can also check out our comprehensive overview of ISAs here.
We've identified three Cash ISA providers in particular that offer strong ethical and sustainable options for your savings, with the Ecology Building Society and Triodos offering among the best rates. Take a look at these options here.
Stocks & Shares ISA
There are two ways you can approach Stocks & Shares: either by picking the investments yourself, in which case you should look at our Fund Finder for all the ethical and sustainable investment funds you may want to invest into, or if you are less comfortable choosing your own investments, by choosing a ready-made portfolio.
We outline the options for ready-made portfolios with a specific ethical and sustainable focus in the Stocks & Shares ISA section of our website, and give an overview of these in the table below.
The maximum you can invest into a Lifetime ISA is £4,000 per year. The government gives a 25% bonus of anything you deposit, meaning if you deposit the full £4,000, the government adds an extra £1,000 on top. A Lifetime ISA can only be used towards the deposit of your first house or in your retirement, otherwise you will be subject to some withdrawal penalties.
Beyond this, a Lifetime ISA is very similar to a Stocks & Shares ISA, though only a few providers offer them.
You can can pick investments yourself, in which case you should look at our Fund Finder for all the ethical and sustainable investment funds you may want to invest into, or if you are less comfortable choosing your own investments, by choosing a ready-made portfolio. There are three providers where you can choose an ethical and sustainable ready-made portfolio for a Lifetime ISA: AJ Bell, Nutmeg, and OneFamily. These are outlined in the Lifetime ISA section of our website.
Innovative Finance ISA
Innovative Finance ISAs allow you to invest directly into companies or projects, which are often smaller in size and need direct funding, rather than through the stock market into large companies. The potential impact of your money is therefore much higher, though so too is the risk.
There are only a few providers of Innovative Finance ISAs that focus on ethical and sustainable investments: Triodos, Abundance and Energise Africa. These are all outlined on the Innovative Finance ISA section of our website.
Junior ISAs come in two forms: either Cash Junior ISAs and Stocks & Shares Junior ISAs. We have identified only one Cash Junior ISA with an ethical and sustainable focus: offered by Triodos.
For Stocks & Shares Junior ISAs, similar to traditional Stocks & Shares ISAs, you can either choose the investments yourself (or with your children), in which case you should look at our Fund Finder for all the ethical and sustainable investment funds you may want to invest into, or if you are less comfortable choosing your own investments, by choosing a ready-made portfolio. We outline these options on the Junior ISA section of our website.
Please get in touch at email@example.com if you have any questions or want any more information on ISAs and related investments. Please note that nothing in this article or on www.theethicalinvestor.co.uk constitutes as financial advice.