New findings confirm Foresters Friendly Society's ethical investment research

Monday, November 15, 2010

Brits are set to embark on ethical savings drive

  • New research published in conjunction with National Ethical Investment Week shows ethical investment has risen to £19.2bn, its highest level in a decade
  • Findings reaffirm Foresters' research that said 58 per cent of UK adults expect the amount invested in the UK ethical investments market to grow over the next decade
  • Children's ethical saving market to witness further growth despite Government scrapping of Child Trust Fund (CTF) programme

Independent research commissioned by Foresters Friendly Society and undertaken by YouGov, which revealed UK adults' attitudes towards ethical investments, has been reaffirmed by a new report published this week.

Foresters Friendly Society's own recent findings, have been reaffirmed by new research published in conjunction with National Ethical Investment Week. The new report shows that ethical savings and investments have risen by a third to £19.2bn, the highest level in a decade.

According to Foresters' research, the majority of people (58 per cent) surveyed believe that this positive trend will continue over the next decade. 

More than one fifth (21 per cent) of those surveyed believed the growth to date has been driven primarily by a combination of a genuine commitment to support companies involved in ethical operations, such as sustainable energy.

An acceptance that financial returns should not be the sole guide of investment choices was the primary growth driver identified by another 20 per cent of respondents.

Among higher gross income groups, for example those adults in the £40,000 - £44,999 band, the proportion of respondents believing investment in ethical products will continue to grow in years ahead rises significantly to 74 per cent, compared with 58 per cent of those with incomes of £20,000 - £24,999.

The children's savings market can potentially expect to witness growth in volume and aggregate value of ethical investments, after a third (34% per cent of respondents), all with children and grandchildren, said they would consider an ethical investment if the beneficiary was either their child or grandchild.

Following the publication of this research, Foresters Friendly Society has also announced a new offer of an Ethical Child Savings Plan (ECSP) , which is now especially relevant in light of National Ethical Investment Week and the new report on ethical savings.

The product, is a new variety of Tax Exempt Savings Plan (TESP), a regular premium savings plan that can only be offered by friendly societies. It has been designed to bridge the gap in the children's savings market created since the Government's decision to terminate the Child Trust Fund (CTF) scheme from January 2011.

The ECSP allows grandparents and parents to invest £25 (or from £15 online), per month, for a self-selected term between 10 and 25 years. On maturity, the savings plan will provide the child recipient with a cash lump sum exempt from both income and capital gains tax.[1]

Premiums will be invested in the ethical section of Foresters Friendly Society's with profits fund, which avoids investing in companies that are harmful to the environment, people and animals.

The research also established that nearly half of UK adults (45 per cent) believe the Government has a responsibility to promote ethical investments.

Neil Armitage, Marketing Director, of Foresters Friendly Society said, National Ethical Investment Week will  flag to the public at large that ethical investing is the ideal choice for anyone seeking a sensible and socially responsible way to save for the future.

"As a benevolent organisation we naturally have an interest in ethical investments and we're delighted to offer our new ECSP product which reflects both our own values and those of the public who are increasingly endorsing ethical products, as proven by this week's research."

   "Mirroring the Government's drive to promote the notion of a 'big society', we believe that the launch of the Ethical Child Savings Plan will reconcile the void left by the end of the Child Trust Fund scheme and this new ambition to empower communities."

The UK Regional Picture

London  Emerges As Ethical Investment Awareness Hub

  • The research also found that London is the UK's awareness hub of ethical investments. Londoners have the highest awareness of ethical investments with only 45 per cent of respondents from the capital being unaware of the term compared to 58 per cent of those living in the North of England.
  • People in the Midlands and Wales are the least likely to support the suggestion that the Government should actively promote the concept of ethical investment with only 40 per cent strongly agreeing or agreeing with this view. This compares with 50 per cent of people in the East and 55 per cent of people in Northern Ireland. 

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,035 adults. Fieldwork was undertaken between 18th to 20th May 2010. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

[1] Tax rules may change and are subject to individual circumstances.  The child may not get back the amount that has been saved in the plan.