In the light of the recent announcement that Lloyds Banking Group paid 25 of their staff members £1m, while continuing a redundancy package that will result in 40,000 jobs being lost, it’s hard to keep the faith in the "big four" UK banking groups, writes Katy Maydon.
When considering which bank to entrust with your money the criteria will inevitably be different from person to person. Whether it be getting more from your money or having family already with that particular bank, distance of the nearest branch from your house or ability to personalise your debit card; the reasons you choose to bank where you do may not always come from careful research.
It’s largely easy for UK citizen to get a bank account on the high street. All it usually takes is identification, proof of address and a credit check. However if, when thinking on which bank to deposit your money into you also considered the ethical practices of the bank, would you change your mind?
Move Your Money
Moveyourmoney is an organisation that promotes the idea of ‘moving your money’ to more ethical banks and building societies. Each banking group win an ‘ethical consumer score’ marked out of 20. These ratings reflect environmental issues, animal and human rights views, tax grievances, bonuses and ownership.
Move Your Money postulates that large banking groups rely on deposits to fund all their practices, ethical or otherwise. By moving your money to a bank that invests only things you support every penny you deposit supports a cause.
Or, as Move You Money puts it: "by moving your money you can directly support an ethical and socially useful bank, and send a message about the sort of society and economy you want to see. And one you’d rather not."
– The Co-operative Bank (including Smile Bank) is the only ‘ethical bank’ that offers a current account as well as lending and saving. The Co-op Bank has all the ATM and branch facilities that other major bank groups also have. However, the Co-op has a strong ethic of who they will and will not lend to.
– Charity Bank is not only a bank, authorised by the FSA, but also a charity. Charity bank doesn’t offer personal finance services, only lending and saving for charities and social enterprises.
– Ecology Building Society only offers loans and saving. Even though a building society and not a bank, Ecology Building Society deserves mention because of its ethical, environmentally focused mission.
– Triodos offers loans and savings, but also current accounts to charities and social movements. Triodos, one of the world’s leading sustainable banks, makes all of its lending public and even though there are no branches in the UK.
– If you’re considering moving your money for ethical reasons it may also be worth looking into building societies. Building societies are run by their members and owned by their customers, they have no external share holders, which means profits don’t move out of the bank.
However, joining an ethical bank many not be as fulfilling as it may seem. Many ethical banks do not offer current accounts to individuals or access to walk-in branches. Of course this poses the question of how you deposit money into an ethical bank account if you can’t walk-in and hand them your cash. Triodos, for example, uses RBS (and NatWest) to deposit money; this to me seems a little counterproductive.
Look to moveyourmoney.org.uk or Ethical Consumer Magazine for information on ethical banking before you decide to start storing cash in your mattress or trading in kind.