Powering a low-carbon future

UK local authorities have pledged to work towards cleaner air and greener energy, but with limited government investment, they are having to resort to other funding sources

This week The Times published this article in association with UKSIF & Raconteur. For clients & friends interested in getting a copy of this simply use the form below and I will eMail one to you.

UK green investors can drive net zero

Former governor of the Bank of England Mark Carney believes the UK is uniquely positioned to transform pensions and work towards a net zero
future

Investing to generate genuine impact

With a lack of standardisation around criteria and a passive approach to screening, sustainable investing is yet to reach its potential. A change of mindset is needed.

Signposting a priority pathway to Paris

A new type of green finance has emerged and, rather than simply blacklisting “bad” companies, it is offering even the heaviest polluters a pathway to a greener future.

Sustainable Drivers

Investors’ interest, enthusiasm and passion for sustainable investing have been growing steadily over recent years, but what are the key drivers of more conscious investments?

How the City of London can keep its green crown

As Brexit threatens the UK’s pre-eminence as a financial hub, spearheading sustainable finance offers a welcome lifeline

Picking a green winner

There is compelling evidence that environmental, social and governance funds
can outperform their less sustainable counterparts, but what’s driving superior returns

Debunking six ESG myths

From low returns to a lack of interest among the elderly, there are many misconceptions around environmental, social and governance investing. Here are our top six myths


Request your copy of the Sustainable Investment Article
First & Last
Town, County

Clean Slate: Green Slate

This year’s Good Money Week was all about giving your money an ethical overhaul.

This pandemic has been a wake-up call for many of us in many different senses, but especially when it comes to our finances.

That’s why the theme of this year’s Good Money Week was ‘Clean Slate Green Slate’, encouraging people to consider green options as they start afresh with their finances.

This year we commissioned FinText to analyse public conversations between private investors on the Reddit platform and found that ESG rarely came up and when it did it was often objected to.

We also share the results of our YouGov survey which shows that while half of us saved money and many are now talking our finances more seriously, most of those who saved would prefer a bog-standard savings account to an ISA or investment platform.

However, 51% of us want the government to prioritise lowering emissions when it builds back better even if it takes longer and 49% wants an affordable build back better bond. 


Jan works with UKSIF and Good Money

The launch of ‘Financing a Just Transition Alliance’

 

Growing numbers of investors and banks recognise the need to support climate action that raises society with it –  a just transition.

UKSIF is part of the Financing a Just Transition Alliance, a collaborative initiative of banks, investors and other stakeholders in the UK, set up to build on the growing momentum for a just transition and encourage practical steps forward in the run-up to COP26.

The Alliance will help implement the recommendations from the investor and banking tracks of work.

There is real interest to take the high-level commitments to the just transition to a practical level – showing how the social dimension can be part of effective climate action by financial institutions, not least in terms of place-based strategies.

The Alliance is perceived as a light-touch network that generates real world outcomes on the road to COP26.

Jan is a member of UKSIF

Our ESG Commitment

Environment :
Our Environmental responsibilities are personal. 
We care about our businesses impact on our neighbours, our community, nature and the world we inhabit. 
We commit to Net Zero by 2030.

Social :
We believe in the ability of business to do good in our local, national and global communities, avoiding all investments that do harm. 
We pay our taxes and additionally contribute to local charities.

Governance :
We are transparent in all our transactions. 
We charge an agreed fixed fee for initial advice and no additional “adviser facilitated initial fee”. 
We are small, we are local, we have a Global view.

Is your pension a quiet one?

It’s always the quiet ones you have to watch, so Mum used to say: “What are they not telling you? What have they got to hide? Never trust the quiet ones.”

Your pension is probably a quiet one – and it’s keeping schtum for a reason. The last thing it wants you to do is start taking an interest. Because then you’d know its (probably dark) truth and you’d start meddling and creating a lot of work for your pension and those managing it.

It’s even more tempting though, isn’t it, when you know it doesn’t want you to… Of course, you should. Because you need to know: is yours the right pension for you?

If you are in a Company Pension you should ask the person responsible for this – how and where is my money invested? Have you asked your employer how they manage your pension?

And, if you have a personal pension does your adviser talk about how your investment meets your preferences?

You can talk to me – a free initial meeting to learn more about this
– or read this to get started: Hot off the press,
the new Good Guide to Pensions 
will intimately acquaint you with your pension, with the hope that you can see its marvellous potential to change the world – and all the places it might currently be invested in that are definitely NOT helping the planet.

Sustainable funds outperform market

Sustainable funds outperform market

This Good Money Week, the latest Good Investment Review reveals that sustainable funds have outperformed the sector average over the last FIVE years – and in particular throughout the coronavirus crisis.

Since 2015, the ethical UK equity funds monitored have brought average returns of 25.76 per cent compared with 16.52 per cent for the sector. Meanwhile, the ethical global equity funds studied returned an average of 85.23 per cent compared with 76.12 per cent for the sector.

In the eight months to October 2020, 12 of the 15 ethical UK equity funds studied performed better than the market average (80 per cent), as did 41 out of the 56 global ethical funds (73 per cent).

The October 2020 review from Good With Money reveals that despite the financial turmoil of the global pandemic, assets held in funds with an ethical or sustainable label in the UK have continued to rise, reaching a whopping £158 billion. This is up 14 per cent from the previous six months.

John Fleetwood, Director of Responsible and Sustainable Investing at Square Mile, says: “positive impact need not come at the expense of financial returns, and if anything, investing for positive impact can improve returns.”

The Good Investment Review October 2020

As Good Money Week 2020 begins, the ninth Good Investment Review finds that sustainable funds have outperformed the sector average over the last five years – and in particular throughout the coronavirus crisis.

Since 2015, the ethical UK equity funds monitored in the review have brought average returns of 25.76 per cent compared with 16.52 per cent for all funds in the sector. Meanwhile, the ethical global equity funds monitored have returned an average of 85.23 per cent compared with 76.12 per cent for the sector.

In the eight months to October 2020, 12 of the 15 ethical UK equity funds studied performed better than the market average (80 per cent), as did 41 out of the 56 global ethical funds (73 per cent).

The October 2020 review reveals that despite the financial turmoil of the global pandemic, ‘assets under management’ held within funds with an ethical or sustainable label in the UK have continued to rise, reaching a whopping £158 billion  – up 14 per cent from the previous six months.

The rise represents further evidence of the surge in interest in investing for positive impact or with environmental, social and governance (ESG) factors in mind.

John Fleetwood, founder of 3D Investing (now part of Square Mile Consulting and Research), said: “The evidence shows that positive impact need not come at the expense of financial returns, and if anything, investing for positive impact can improve returns.”

The latest review covers developments in methodology for measuring ethical and sustainable funds, and attempts to clear up some of the confusion over the different terminology used to describe them.

There is must-read commentary from some of the UK’s top ethical and sustainable fund managers.

The Review rates funds that have an ethical or sustainable approach according to how well they do what they say on the tin.

NEW LAMPS FOR OLD

A bad outcome for Aladdin . . .
. . . but what if you could change your old pension for new?

What if that new pension had fairer charges and better outcomes?

Fairer charges: 
Many are still holding on to old pension funds, unaware of the amount of charge being taken every year to cover the administration of the funds or what exactly that charge is paying for. 
Often annual valuations sit gathering dust, unreadable and a mystery to most except the people who produced them.
Is the pension giving value for money or is it just a neglected asset that only has meaning when we decide to start withdrawing money. 
Often the pension fund is our second most valuable asset after our home and, like our homes, if no regular maintenance is done, it fails to achieve its highest value. 

Keeping informed about old pension funds, particularly where you have several from different providers, is not remotely interesting to most people and at best takes you away from more interesting pursuits.

However, just like house maintenance or a regular visit to the dentist it can make a big difference later. 
It can be more pleasurable than a visit to the dentist, once you understand what you are looking at and how to judge it. 
Knowledge, in this case, is to have the means of control.
You could even learn to love your annual review.

Better outcomes:
They come in two ways, better financial returns for you and understanding of what you are investing in and that those investments are technologies of the future, for example not oil and gas but alternative energy. 
Not only would that represent better social outcomes but better returns as the world abandons old lifestyles and embraces the post COVID-19 world of remote working, medical research and better care facilities.

The City woke up to the challenges of climate change when the insurance claims started to build.

Many of us started to take notice when David Attenborough spoke of the damage done from plastic waste and now we know that pandemics are the result of us invading the wild world and turning it into a place of production to satisfy humanities constant need for more and more consumption.

As a member if the Ethical Investment community since 2005, an Independent Financial Adviser since 1992 and someone committed to better outcomes for each of my clients, can I help you exchange your old pensions for new?

Increase in Minimum Pension age confirmed

Increase in Minimum Pension age confirmed

“The government … proposes to increase the age at which an individual can take their private pension savings at the same rate as the increase in the State Pension age.

It is important people have the opportunity to plan properly for this change and so the government proposes to wait until 2028 (when the State Pension age will rise to 67) to fully implement this change.

From 2028, people will not be able to draw their private pension benefits without a tax penalty until age 57, whether or not this is the point at which they stop work.

From then on, the minimum pension age in the tax rules will rise in line with the State Pension age so that it is always ten years below.”

A sustainable return

In the light of the Covid-19 pandemic, my newsletter, April 2020, it is important to give a view of the portfolios we manage. 
Not individual valuations but an overall position.

To put things in context, the portfolio with the biggest drawdown has reduced in value by 19.5% but most have reduced by less than 14%, after increasing from January 2019 to the current fall in February 2020 by 28.5%.
The fall was dramatic, and we may still see further falls as the markets are tested.

However, a 28.5% recovery in a single year demonstrates that markets recover and normally faster than anticipated during a crisis.

Portfolios are designed to match clients’ individual appetite for risk and should provide stability, providing better than cash returns and out pacing inflation.

Investments that help the world stay healthy, minimise waste of scarce resources and provide a sustainable return

Divorce

Do you know anyone who may be involved in a divorce? 

I know its not usual to enquire about their financial settlement at an early stage.

It could be very helpful if you did, as it seems that a majority of divorcing couples are relying on their Solicitors to value the pension benefits.  

As pensions are a very complex area of finance, with a wide range of rules and taxation, Solicitors are not generally understanding but instead are relying on the pension trustees or providers to supply the answers.   

Clearly the pension trustees and, in some cases, the providers, have a vested interest. 

It is important that specific pension advice is sought, to avoid costly mistakes. 

We can help ask the right questions and get better, fairer outcomes.

Pension Death Benefits :  NEST

I have only recently been told that the death benefits under NEST should have Nominations for Death Benefits added, as the fund otherwise would go to the member’s estate, where it could be subject to taxation.

As NEST pensions are the preferred pension for many employee schemes it would be helpful if you let any members of the family or friends  know.  It’s a simple matter to obtain a Nomination form directly from NEST

For those friends or family who are in employee schemes or have retained benefits, it is advisable for them to check the Scheme Rules.

Make Our Money Count

“Make Our Money Count”
– Public Demand for Sustainable Pensions & Savings Reaches Record High

Climate Anxiety is taking hold of our younger friend and relations, as a member of Women in Sustainability I regularly meet to exchange ideas on a range of subjects including sustainable fashion, food waste and how to make a positive difference in the world we inhabit.

As a member of the Ethical Investment community, I work with clients to ensure their money is used to meet their needs first and then to meet their values.  

Until recently it has been a slow burn, with many critics and challenges from within the retail investment community. However, attitudes are changing and so are the opportunities.

The City’s Green Initiative is a welcome response.

The City institutions are now on board, fearing overwhelming insurance claims from disasters caused by the changing weather and reducing values of assets within the larger pension funds, most of which have historically relied on returns from fossil fuels.

The benefit of running a small firm, allowing freedom to move quickly, is that I recognised the opportunities to invest in alternative energy, new science and engineering developments.

Having access to excellent research on what is actually in the chosen funds, I have been able to provide investments that have outperformed the stock market for the last 5 years.

They have been good for my clients and good for our future.

My research process allows for client specific investments that meet their values and avoid investments in things they are unhappy about, for example a young Vet student recently asked me to invest only in funds that have a good Animal Welfare approach.

I have always believed that Capitalism is good, but it must be Good Capitalism.  

Providing money to help solve problems;
ESG means Ethical Social and Governance.
Governance means that the providers of collective funds demand changes at Board level in the way firms are run, for the benefit of their employees, the local community and their supply chain.

Information source: FTSE Russell ‘Green Economy’

 

 

Pensions and National Insurance

I offer this reminder, as I am often asked about the need to pay National Insurance and the most appropriate way to achieve full benefits.  It is easy to check your personal account on line. 

  • the State Pension changed in April 2016.
  • if you reached State Pension Age before April 2016, you needed to have National Insurance contributions or credits for 30 years to receive the full pension.
  • if you reached State Pension age prior to April 2016, the State pension is made up of the Basic Old Age Pension and the Additional State Pension; otherwise known as State Second Pension (S2P), State Earnings Related Pension (SERPS) or the Graduated Retirement Benefit.
  • Those who enter the National Insurance system on or after 6 April 2016, will need to have a minimum of 10 years National Insurance contributions or credits to qualify for a State Pension.
    To receive the full pension, they will need to have National Insurance contributions or credits of 35 years. For everyone else, transitional rules apply. 

Clearly most of us do not rely on the State Pension and the question is how much additional funding is needed to achieve a realistic income at the time you plan to stop earning or reduce your working time.

Most people are shocked once they look at the levels of funding necessary, which means that you can either choose to fund to the desired outcome or delay your plans. Most importantly start early and fund realistically but also take the opportunity to get a realistic forecast.

Pension funding is still the most tax efficient way for all but basic rate tax payers, with Stocks and Shares ISAs used for anyone who is currently a basis rate tax payer. 

One important warning, Cash ISAs give a return less than inflation and the only tax benefit is that the small amount of interest is tax free. 

They do not make financial sense for medium and long-term savings. Inflation is expected to run at about 2.5% in the foreseeable future.  Stocks and Shares ISAs are exposed to market fluctuations but rarely give a negative return in the longer term.