Cash ISAs

Ethical buying guide to Cash ISAs, from Ethical Consumer

Ethical buying guide to Cash ISAs, from Ethical Consumer

This is a product guide from Ethical Consumer, the UK's leading alternative consumer organisation. Since 1989 we've been researching and recording the social and environmental records of companies, and making the results available to you in a simple format.

What are ISAs? What ethical options are available?


This guide includes:

  • Ethical and environmental ratings for 41 ISA's
  • Best Buy recommendations
  • What ISAs are
  • What's so good about building societies and mutuals
  • Moving accounts



This product guide is part of the special report: Ethical Money

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Our ratings are live updated scores from our primary research database. They are based on primary and secondary research across 23 categories - 17 negative categories and 6 positive ones (Company Ethos and Product Sustainability). Find out more about our ethical ratings


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Last updated: April 2018 






Special Report

Ethical Issues in the Banking Industry.



What is a cash ISA?

 Cash ISAs are more popular than stocks and shares ISAs because there’s no risk to your money. Cash ISAs are the same as any standard savings account except they are tax free for a limited annual amount of saving. For the tax year 2017-18 you can put up to £20,000 into a cash ISA, a stocks and shares ISA, an innovative finance ISA, or a combination of the three, if you’re a UK resident aged 16 or over.

The specialist ethical providers Triodos and Charity Bank both offered competitive cash ISA rates in March 2018. For example, Charity Bank was offering a 33-day notice ethical ISA paying 1.7% annually at the time of writing. Triodos was offering 1.05%.


Image: cash in ethical shopping guide


For comparison, Nationwide, a big mainstream building society, was only paying 0.75% but withdrawals could be made without notice.



Innovative Finance ISAs


An innovative finance ISA – sometimes called an IFISA – is an ISA that contains peer-to-peer loans instead of cash in a bank or stocks and shares in companies. They were introduced in 2016 to make it easier to invest tax free with a wider range of providers.

Peer-to-peer lending matches up investors, who are willing to lend, with borrowers, who could be individuals, businesses, or property developers.


Triodos and Abundance both offer IFISAs. Triodos is currently offering three IFISAs in renewable energy projects and a charity, with interest rates of 5-7% and terms of between 5 and 17 years. Abundance invests in green energy projects at a rate of 6-8% over 3-5 years.

See our article on Crowdfunding for more details.



Stocks and shares ISAs


These investment type ISAs can be linked to ethical funds, see our dedicated guide.




Divesting your ISA from the fossil fuel industry


Mainstream banks may well take your ISA savings and lend them on to a range of companies involved in controversial activities. This could include: investments in armaments companies, nuclear weapons, animal testing, tobacco, pornography and, of course, the fossil fuel industry. You can read more about the big five banks and their controversial investments in our guide to current accounts.




Corporate policies

Most banks do now have Corporate Social Responsibility (CSR) policies which give the impression that they are as concerned about some of these activities as you are.

However looking at their actual investments, as we have done for the ranking table (above), shows that in many cases these words are little more than hot air.

As you'll see from the table very few banks, other than the three ethical ones at the top, get our best rating for environmental reporting and only three institutions (Charity Bank, Triodos, Co-op Bank) get a product sustainability mark for having an ethical lending policy.

You can read about the most ethical options in the Best Buy box above, all of which make positive investments that benefit society and the environment.





Mutuals (also known as building societies) are also a good option for ISAs. Mutual deposit takers account for about 34% of cash ISA balances. They are seen as a more ethical option due to the fact they lend mainly in the housing market and don't invest in fossil fuels and other unethical sectors.

All the mutuals featured on the table above pick up an additional mark in our scoring system for company ethos due to their democratic structures. They also have branches on most high streets which makes them easy to find and use. You can read more about mutuals and building societies in our guide to savings accounts.




Ease of moving accounts

Government efforts to promote competition in the sector mean that it’s pretty easy to move your whole Cash ISA to a more ethical provider should you choose. In theory it should take no more than 15 days, but you should follow advice on how to do it without losing its tax free status. Contacting the new provider is usually the best place to start.




Company behind the brand


Nationwide Building Society is the largest building society in the world, with more assets than all the other British building societies combined. 

Nationwide was marked as having a positive investment policy because it confirmed that “Nationwide has no direct investment in coal, oil, gas, tobacco, arms, alcohol or gambling. Since that statement, we have also withdrawn from new commercial lending, so our business lending is reducing.”[1]

Nationwide got our best rating for likely use of tax avoidance, and middle rating for environmental reporting. 

Want to know more?

If you want to find out detailed information about a company and more about its ethical rating, then click on a brand name in the Score table. 

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1.  Email to Ethical Consumer from Ms Slade Nationwide’s Media Manager, February 2018



This product guide is part of the special report into ethical money. See what else is in the report.




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