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Ethical Savings Accounts

Finding the most ethical savings account, with ethical and environmental ratings for 50 savings brands and Best Buy recommendations.

We explore non-bank options including building societies and credit unions, look at high street banks and their lending practices, along with executive pay and tax avoidance. We also shine a spotlight on HSBC.

About 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.

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What to buy

What to look for when choosing a savings account:

  • Does it have ethical and transparent investing and lending policies? Make sure that your chosen brand is clear about how it will invest your money.

  • Is it a mutual / member-owned? Organisations that are owned by and run for the benefit of its members, such as building societies, rather than for short-term financial gain, are usually a more ethical choice for banking.

  • Does it have any ethical credentials? Some organisations may be registered with the Fair Tax Mark or are certified B Corporations, showing a commitment to ethical business.

     

Subscribe to see which companies we recommend as Best Buys and why 

What not to buy

What to avoid when choosing a savings account:

  • Is it financing environmental destruction and climate change? Many banks have extensive investments in fossil fuels, including the most damaging ones like tar sands, ultra-deep sea drilling, and fracking.

  • Is it funding human and animal rights abuses? Several big high street banks have been linked to multiple human rights abuses.

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Score table

Updated live from our research database

← Swipe left / right to view table contents →
Brand Score(out of 20) Ratings Categories Positive Scores

Our Analysis

As more people are becoming aware of the ethical implications of who they bank with, what does it mean for a savings account to be ethical?

We have looked at issues like tax avoidance, director's pay, lending transparency, and carbon claims for the companies behind 50 savings account brands to help you find an eco savings account that matches your ethics.

At the time of writing, interest rates have been rising in the UK. But as well as thinking about rates, it’s important to not put your savings pot in the hands of destructive companies responsible for financing everything from nuclear weapons to deforestation.

With almost 14 points difference between the top and the bottom of our score table, how well does your bank rate for looking after your savings in an ethical manner? The answer if you're with one of the big high street banks is 'not very well', but building societies and green banks tend to do much better. Read on to find out the detail.

Do the high street banks have ethical savings accounts?

As the head of Natural England recently commented in The Guardian, “even bankers need to eat, drink and inhale clean air”. But, given what some banks fund and invest in, you’d think they didn’t get the memo.

When you deposit your savings pot into an account with a bank or building society, that company can then use your money to lend to others, including other companies. Some of the banks we rated were involved in financing some really damaging companies and projects, with the same names cropping up again and again: HSBC, Barclays, Lloyds, NatWest, Santander, and Banco de Sabadell (TSB).

These and some other banks have essentially been fuelling abuses at the intersection of animal rights, human rights and the environment. Many other organisations are now tracking the activities of banks and reporting on them in detail, including but not limited to:

How do banks rate for climate change activity?

Out of all the savings accounts rated, only four got a best rating for Carbon Management and Reporting: Charity Bank, Ecology Building Society, Triodos and Metro Bank.

The majority of companies received a worst rating. This includes the big high street banks.

Many did not discuss the carbon impacts of their investments and were also found to be funding climate destructive sectors. It is hard to believe that banks are still providing billions of pounds in funding for fossil fuels in a climate crisis, but for a number of the companies rated in this guide, this was very much the case.

A forthcoming article ‘Who’s Financing Fossil Fuels’ will have a more detailed overview of the banks funding fossil fuels.

Image of person counting money in notes

Sustainable savings account options

For all the harms that banks can be involved in, thankfully there are more ethical options for your savings.

Member-owned building societies and credit unions are not focused on corporate shareholders and can be a great alternative to high-street banks like Barclays, Santander, HSBC, NatWest and Lloyds. You automatically become a member when you open a savings account with a building society or credit union.

Although there was some variation, building societies generally scored pretty highly in our table, with Ecology Building Society and Yorkshire / Chelsea Building Society scoring the best.

There are currently 43 building societies and 7 credit unions listed as members of the Building Societies Association, ranging in size from relatively small, e.g. Ecology Building Society, to very large, e.g. Nationwide, Skipton.

For some people, part of the appeal of a building society might include the fact that they aren’t all headquartered in London. Some operate nationally and others locally, so it’s worth checking what your local building society offers, as we couldn't include all of them in the guide.

As well as operational structure, for a savings account to be ethical it is important for it not to contribute to social and environmental harm. Some companies also actively finance positive social projects. Charity Bank, Ecology Building Society, Triodos and The Cooperative Bank all scored at the top of our table and had positive lending policies.

Green savings accounts

As its name suggests, Ecology Building Society is unique in the fact that it states that it’s “dedicated to improving the environment by supporting and promoting ecological building practices and sustainable communities”. It does not lend to projects involved in the fossil fuel and arms manufacturing industries.

Triodos publishes details on every institution it lends to in its industry-leading ethical policy of transparency. If you choose to open a savings account with them, its website says, “While you earn interest on your savings, we use your money to finance projects that make a positive and lasting impact on society, culture or the environment.”

The Cooperative Bank are generally known as being an ethical high-street bank and it prides itself on having a customer-led ethical policy. It is kept accountable by a Customer Union for Ethical Banking, which has links to Ethical Consumer. It doesn’t finance fossil fuels or other environmentally damaging projects, and has a commitment not to lend to organisations abusing human rights, manufacturing weapons or promoting hate.

When it comes to environmental claims, a Which? survey from 2021 found that, “69% [of respondents] said they would not know how to find information about a bank’s green credentials, making it difficult to compare providers”.

Triodos, Ecology Building Society and Charity Bank all received a Best rating in our environmental reporting and climate change categories, meaning they had been clear and transparent in what their environmental impacts are and what actions they are taking to manage this.

Savings in a cost of living crisis

In many ways, October 2022 has been a strange time to be writing about savings accounts. Widening inequality has been increasing the disparity between those who are financially vulnerable, with little to no savings, and those who have been able to save more than before. This is something to think about when choosing a savings account, and saving in a credit union could contribute to supporting others in your community.

Economic inequality in the UK is one of the worst in Europe and, as we experience a cost of living crisis, it is getting worse.

Around 1 in 4 (24%) UK adults currently have low financial resilience according to the Financial Conduct Authority’s latest Financial Lives survey and 60% of all adults, equivalent to over 30 million people, said that they were finding it a burden to pay their bills. Economic inequality highlights clear social biases with women and disabled, migrant and Black, Asian and Minority Ethnic (BAME) populations disproportionately affected.

The cost of living crisis has meant those already financially vulnerable will be the hardest hit in a system that is designed to fail them.

Not only is the number of people unable to save increasing, so is the number of people in debt and, as a result, the number of people forced to borrow from illegal lenders. In March 2022, The Centre for Social Justice (CSJ) published a report discussing loan shark victims which found that most victims already faced an intersection of disadvantages. The gal-dem website discussed how a disproportionate number of people in racialised communities are left with no other option than to borrow from loan sharks. Racialised communities in the UK are more than twice as likely to be in debt than white people, with Black African and Bangladeshi households having ten times less wealth than white British people.

Whilst banks' profits are in the billions, illegal lenders are using psychological, and sometimes, physical intimidation to prey on those already struggling with household debt. The CSJ report stated that over a quarter of all victims surveyed had considered or attempted to take their own lives at some point, with almost 75% saying they’d done so while borrowing money from an illegal lender.

On the flip side, a recent article in The Guardian pointed to the fact that approximately £270 billion is gathering dust in accounts which pay no interest, and about half of people have either never changed savings accounts or changed over five years ago.

Some of the big bad banks discussed in this guide are fuelling the inequality crisis through excessive directors' pay and tax avoidance. The ability to save is becoming more and more of a privilege. If you have that privilege, it is all the more important to choose a savings account from our list with ethical values, not one that continues to exacerbate existing social inequalities.

Saving tips

  • If you have debt (which includes mortgages), and are paying more in interest on the debt than you can earn on savings, it may make more sense to focus on paying off the debt first, unless your rate is lower or there are penalties for repaying early. 
     
  • There are various apps and online tools to help you save, plan a budget or calculate the value of saving. One technique is known as ‘skimming’, where you regularly skim off just a few pounds to round off your balance in any current accounts, and transfer that to a savings account.
     
  • Savings accounts for children are an important consideration. Up to 16 or 18 years is a good amount of time to build up savings, and these accounts tend to have higher interest rates too.
Person putting coins into piggy bank

Ethical savings options: credit unions

Another great option for a more ethical savings account can be finding your local credit union.

In a cost of living crisis, credit unions can also provide vital loans to poorer members of the community, as explained in the Q&A below. So joining a credit union not only avoids problem banks but can also be good way of acting in solidarity with your local community.

We didn’t include credit unions in our ratings table as there are so many in the UK. But they are another more ethical alternative to a traditional savings account from a bank if you’ve gone off banks altogether. Operating at the local level and offering different types of services to a high-street bank, they are owned by their members, rather than shareholders, and are essentially built for the local community by the community.

If you would like to save with your local credit union, use the website Find Your Credit Union to help you find what’s available in your community:

We also have a more in-depth article on credit unions.

Q&A with Sheffield Credit Union

We approached a local not-for-profit credit union in Sheffield, Sheffield Credit Union, and spoke with CEO Jacqueline Hallewell.

Q: Could you describe what a typical day in your credit union looks like?

A: A credit union is staffed by people who care about helping local people to experience better financial wellbeing. In a survey of our staff, this, and working with a supportive and caring team featured highest. The day begins with catching up on any emails or online services messages that have come in overnight. Our busy helpline starts soon after, and we will have appointments in our private appointment room to help people join up, complete applications for savings, budgeting accounts or loans or sign for loans which are then distributed to them by the end of the day. Upstairs, our busy lending team are reviewing applications, and where necessary, contacting applicants for further details to help make decisions. Our credit control team are calling members who may have missed a payment to understand why, and to support them to resolve the issues. The managers are supporting the teams, and working on longer term projects, improvements and partnerships to better support members. Our volunteer directors are often in touch to support development, sometimes even operations and to be known to the staff team.

Q: How is a credit union different to a high-street bank?

A: Credit unions are not all the same. This is because they are independent of each other and can adapt what they do in response to the needs of their membership. Some offer simple savings and loans. Some offer tailored products like budgeting/bill payment accounts (as we do) and others even offer mortgages (if they are very large).

The main difference to high street banks is that they are not-for-profit. The directors are volunteers and there are no big bonuses. The money stays in the local area, and the employees are local too. Loans start at £100, whereas banks generally only provide larger loans.

The interest rate is capped at a maximum of 3% per month, unlike rates from other lenders who provide smaller loans. Credit union loans are generally cheaper than many bank overdrafts.

Q: What do you think are the benefits of saving with a credit union?

A: Saving with a credit union allows you to keep money separate from your usual banking. Whilst access to the funds is always possible, this can often be a manual process, and whilst you can withdraw funds most days, it’s not usually instant. This means you are more likely to keep your savings in when you experience a weak moment but can access them when there is a genuine need that you have thought about.

It’s possible, and encouraged, to save while you are repaying a loan too – so whilst your loan balance goes down, your savings go up, and your financial resilience improves. People who don’t believe they can build savings have been successful in doing so this way. Over 70% of Sheffield Credit Union’s borrowers have savings over £100. Savers know their deposits are safe (FSCS protected) and are supporting ethical objectives. They generally receive a dividend on their savings each year, which they, as member-owners, can have a say in.

Q: Have you seen any changes in activity since the cost of living crisis has intensified?

A: We have seen an increase in demand for loans, at the same time as a reduction in the income available to repay loans. This is a very difficult time for our members, as a loan to help with a broken washing machine, replacement uniform for children or car/house repairs may not be affordable for them any longer.

At the same time, members are having to dip into their savings where they have them. We have been busy setting up effective referral pathways for our declined members, so that we can help them to find alternative local help, such as council household support grants, or debt advice.

These are difficult times, but we are a strong community organisation that is here to help in any way that we can.

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Ceramic statue by Grayson Perry called 'Object in Foreground'
'Object in Foreground' by Grayson Perry (2016)

Banking, gender and ethnicity

The association between men and banking is undeniable. So much so, that artist Grayson Perry made it a focus of his Channel 4 series ‘All Man’ in an episode titled ‘Rational Man’ about the ultra-male world of City Banking.

Needless to say, some of the bankers weren’t impressed with Perry’s quite literal interpretation of masculinity and the City of London skyline in his artwork. ‘Object in Foreground’ (pictured here) represents the gender bias of the banking world. The urn is decorated with banknotes and the faces of City bankers and the then UK chancellor, George Osborne, takes pride of place on the tip. Grayson Perry also made 'Animal Spirit' in response to the reckless behaviour that led to the financial crisis of 2008. The image represents the irrational beast that controls the market, half bull, half bear.

Ethical Consumer looked at the gender and ethnicity pay gaps in the finance sector (in a separate forthcoming article) and found that on average, male employees earn almost 24% more than women per hour of work.

For the companies we rated, worst for gender hourly pay gap was HSBC (51.3%), however looking at differences in bonuses provided some of the starkest differences.

Unlike gender pay gap reporting, systematic ethnicity pay gap reporting is currently voluntary and not everyone uses the same reporting standards.

However it’s important to be looking at the intersection of ethnicity and gender, in order to understand how different systems of oppression operate simultaneously in marginalised groups of people.

Some organisations, including Lloyds, HSBC, Barclays, NatWest, and Nationwide have reports on their ethnicity pay gaps, but there is room for improvement. In both gender and ethnicity reporting, many lack appropriate levels of granularity; having only binary options for gender (men/women), and grouping together multiple ethnicities into broad categories.

Digital banks and savings accounts

How well do 'newer' digital or app-based banks perform in our ratings for savings accounts? Our ratings system places digital banks like Monzo, Starling and Revolut, in the middle of the score table. Currently they are not challenging the more ethical banks and building societies who are at the top of the score table, but they score better in many ratings than the big high street banks.

We discuss digital banks in more depth in our guide to current accounts.

Banks and excessive pay for directors

Almost all the savings accounts were marked down under Anti-Social Finance for excessive directors' pay.

The majority were found to be paying over £1 million in total compensation annually to individual directors. For example, HSBC, Barclays, Lloyds, NatWest and Santander all paid over £4m in the latest year.

In a time where an increasing number of people are not only unable to save, but more likely to be in debt, this type of compensation from the companies behind the savings accounts is inexcusable. More information on this appears in a separate feature article on banking and excessive pay.

Banks and tax conduct

Out of the companies rated, 22 received Ethical Consumer’s middle or worst rating for likely use of tax avoidance strategies.

The biggest high-street banks all fail miserably on tax. Santander and Barclays had been criticised by the Independent for allegedly dodging multi-billion pounds in tax. And HSBC, who came bottom of the table, had been repeatedly criticised for tax avoidance in multiple countries.

Ecology Building Society, Leeds Building Society and Coventry Building Society had all been independently verified by the Fair Tax Foundation as paying the right amount of corporation tax.

Rating banks for transparency and financing problematic sectors

We have recently begun to use a new lending transparency ranking. Companies were rated on their lending transparency and policies for ethical lending practice as well as lending to companies in problematic sectors.

No surprise, HSBC, Barclays, Lloyds, NatWest and Santander were amongst those who lost marks for lending to particularly problematic sectors.

You can find out more about who was funding Arms, Fossil Fuels, Amazon destruction and Animal Cruelty in separate forthcoming feature articles.

Additional research and writing for the guide by Sorcha Perris.

Switching to a more ethical savings account

If you prefer not to contribute to the expansion of fossil fuels, production of nuclear weapons, or deforestation of the Amazon, you can switch providers to a more sustainable option, using the information in this guide to help you choose the best option for you.

If you do switch to a more ethical savings account, tell your old provider why you’ve moved your savings. We have a template for contacting your old provider that you can use.

    Company behind the brand

    HSBC is the largest bank in Europe in terms of assets, and the lowest ranking bank in our guide in terms of ethics. Like Barclays, its list of troubling financial relationships is somewhat overwhelming, yet focusing on any one aspect reveals shocking practices.

    HSBC is the world's 9th largest creditor of industrial mining in Brazil, having provided companies including Anglo American and Glencore with almost $450 million in loans and underwriting between 2016 and 2021. Both have a long history of land and rights violations.

    In some rare good news, Anglo American withdrew its 65 applications to mine on Indigenous lands in the Amazon following campaign pressure from Brazil’s Indigenous People Articulation, Amazon Watch and the Munduruku community.

    Want more information?

    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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