In an ISA marketplace where there is little difference between cash ISA offers, many savers are looking at how their money can have more impact in the areas that are important to them, according to research from Triodos Bank.
Triodos, Europe’s leading sustainable and ethical bank, has revealed that nearly two-thirds (63%) of savers want their savings to have a positive impact on organisations and sectors that match their values.
It’s vital for banks to respond to this demand as consumers remain committed to ISAs as a savings vehicle. Only a third of savers (33%) are put off saving in a cash ISA by the current low interest rates, and most are not prepared to take more risks with their savings: only one in 10 (11%) said they would consider higher risk financial products.
Savers are prepared to move their money to create change and have a more positive impact on society. Half (50%) said they would switch providers to make a positive difference with their savings, while nearly two-thirds (62%) believe that if more people chose to save in socially responsible and sustainable savings products, it would have a positive impact on people, society and the environment.
While savers recognise the impact their money can have, most are unaware of the options as there is still a lack of transparency and understanding of most banks’ activities.
Three-quarters (75%) of savers currently have no idea where their bank or financial provider lends their money – and half say they would switch if they found out their money was being lent in areas that negatively affect people or the environment.
67% think that banks and other financial providers need to be more transparent when it comes to disclosing where customers’ savings go.
‘Many people feel they are being kept in the dark about how their money is used by banks and want greater transparency. They want to feel proud that, while their money is growing, they are helping organisations that are making a positive difference to people and the planet. At Triodos, we only lend to projects and organisations that have a positive social or environmental impact. We publish details of everyone we lend to, so savers can see where their money is going and the big difference it is making.’
Head of Retail Banking at Triodos Bank UK
The transition to a low-carbon economy is the top priority for savers who want to make a positive difference. Nearly half (47%) said they would like their money to be used to help grow renewable energy, while four out of 10 (41%) wanted to support energy efficiency.
Social and environmental issues continue to be front of mind; when asked about issues facing the UK today, 77% of respondents were worried about a growing elderly population, 75% were worried about the availability and affordability of social housing and 70% were worried about the breakdown of local communities.
Other issues that were causing concern were the regulation of the financial sector (65%), prison reform and young offenders (64%), and the need to shift to a low-carbon economy (56%).
Concerns about regulation of the financial services sector continue to run high. Nearly two-thirds (65%) said they were concerned about financial sector regulation.
Seven out of 10 (69%) did not know that there are financial providers that publish how they use the money saved in an ISA.
‘Our mission is to make money work for positive social and environmental change. We lend to organisations that are addressing some of the biggest issues we face today, from care for the elderly like Age Exchange in London, to community renewable projects like Bristol Energy Co-op. We provide customers with a clear link between their savings and the positive difference that they make.’
Head of Retail Banking at Triodos Bank UK
Cash ISAs currently dominate around 80% of the ISA market. With more than £80 billion saved in ISAs last year alone, savings could make a significant difference if people made the choice to save with a provider committed to positive impact.
Triodos Bank offers a full range of ethical Cash ISAs and Stocks and Shares ISAs so that people can take advantage of the full ISA annual allowance of £15,240.
Triodos only lends to organisations generating social, environmental or cultural benefit. Key sectors include social housing, charities and social enterprise, renewable energy, organic food and farming and fair trade.
Click here to find out more about Triodos Bank and who it lends to.
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