Weekend Money: NS&I Green Savings Bond

Anna Bowes, Co-Founder of Savings Champion says “Savers who were looking forward to the new NS&I Green Savings Bond will be disappointed to find out that is not going to be launched until later this year, as opposed to the Summer, as previously indicated in the Spring Budget.

While we now know that savers will need to lock their money away for three years, we'll have to continue to wait and see what the rate of interest on offer will be. In the meantime, competition has been fierce recently especially among fixed rate bonds, so rates have been rising. Let's hope this doesn't change and that NS&I acts accordingly"

Some of the best rates currently available are from Sharia provider Gatehouse Bank - which have a green gesture as well as a competitive rate. The 1-year, 2-year and 5-year Green Saver Bonds are paying market leading rates of 1.10% AER, 1.20% AER and 1.60% AER respectively and the 2-year bond is just a whisker below the best rate, offering 1.25% AER compared to Vanquis Bank who is paying 1.26% AER.

The green gesture to these Gatehouse Bonds is that for each account opened or renewed, a tree in a UK woodland is planted on your behalf.

Regardless, the buzz around using your money to do the right thing is growing at a rapid rate as more and more companies and people alike are realising that if we don’t live more sustainably there will be no planet to build an economy on.

With this is mind, there will be savers who do not want to invest their money into the stock markets, but would still like to feel that their cash savings can be used for good – as a result this NS&I Green Savings Bond is likely to prove popular.

An opportunity to educate...

The hype that will no doubt accompany this NS&I Green Savings Bond launch feels like a really good opportunity for the financial services industry to educate people on sustainable investing and what it actually means. The jargon that the industry has adopted is ESG – or Environmental, Social and Governance investing, however as a survey conducted by Chartered Independent Financial Advisers The Private Office (TPO) revealed that while 85% of people are interested in the concept of investing in Environmental, Social and Governance (ESG) investments, more than half of the sample had never heard of the term.

Perhaps more telling, of the 44% that claimed to have heard of ESG, only 56% accurately knew what it stood for, with suggestions of the G standing for ‘green’ and the E for ‘ethical’, for example.

Dean McSloy is a partner at TPO, a Diploma-qualified financial planner and resident ESG specialist. He says: “We are seeing new funds launching all the time accompanied by huge marketing campaigns, but seeing these figures, it feels like education needs to happen at a more fundamental level.”

“Many of these investors have an appetite to invest in ESG funds, but they’re being missed somehow. We need to lose the jargon, explain clearly what these funds really invest in, and where the benefits lie - now and in the future. What clients want and what they feel they can have might not be so far apart as a result. As advisers, it’s our job to help educate our clients but it feels like the industry is missing a really clear mark and potentially wasting a lot of effort.”

McSloy adds: “Huge levels pensions and investments could be working harder to ‘do good’ for society and the planet with just a little rethinking. The industry needs to start giving consumers the information they want, rather than the information we think they need.”

The TPO and Savings Champion Group has gifted 25% of its total value to the environmental charity Restore Our Planet, one of the financial contributors of the recent David Attenborough film, A Life on Our Planet. A fundamental value of our business is to have a significant positive impact towards saving the planet.