Where Can I Move My Money To?

There's a wide range of alternative financial providers that you can move your money to, from well known names like Nationwide and the Co-operative Bank through to local credit unions and community development finance institutions.

When choosing where to move your money, think about:

Ethical Banks

  • Banks that have explicit ethical commitments.
  • Your money can create social or environmental benefits as well as interest for you.
  • Each bank has a different ethical focus, level of commitment and range of products.
  • Competitive rates of interest.
  • Savings guaranteed to same level as at high street banks.
  • Examples: Co-operative Bank and Triodos

There are a number of specialist banks in the UK that have explicit social and environmental commitments. This means they aim to create social or environmental benefit as well as profit.

Each bank has a different ethical focus, different level of ethical commitment and offers a different range of products and services.

Of the banks here, only the Co-operative Bank and the Islamic Bank of Britain offer personal current accounts. If you're looking for a savings account that produces a social and environmental return, as well as a financial return, then all the ethical banks here offer innovative alternatives.

The Co-operative Bank (link)

(including Smile and Britannia)

Ethical Consumer score = 13 / 20 (Co-operative Group = 7/20)

    What's To Like?

  • The Co-operative Bank, Smile and Britannia offer much the same range of banking services as any high street bank. They're subsidiaries of the UK's largest mutual business, the Co-operative Group, which is owned by over 6 million consumers - many of them account holders.
  • Voted number one for customer service for the last 5 years.
  • There are currently over 300 branches of The Co-operative Bank, making their services easy to use. You can also pay in cash and cheques to your account at your local post office if you don't have a local branch in your area. The Co-operative bank offers the same services as any high street bank. As the preferred bidder for Lloyds TSB's sale of branches it is likely to expand to nearly 1000 by 2013. Even if there is no branch locally, account holders can use ATMs in all the major networks. In other words, co-operative banking is on your high street! They also offer telephone and internet banking.
  • For 20 years the Co-operative Banking Group has been developing detailed public position statements on who it will and who it will not lend to. These now cover seven human rights areas, five environmental areas, four international development areas and five animal welfare issues. More details are available here. It also uses your money to campaign on key issues of the moment such as unconventional fossil fuels or the decline of bees. Although other banks have come up with similar policy statements, Ethical Consumer state in 2012 that "none come close to the Co-operative's for clarity and ambition. Their relatively low score is more than compensated for by their sector-leading approach and they remain a clear Best Buy for UK current accounts."
  • Smile, the internet bank for personal accounts, has consistently scored highly in Which? magazine surveys of customer satisfaction.
  • The Co-operative Bank helps small businesses, with free banking for members of the Federation of Small Business.

    The Downside

  • The Co-operative Bank is part of the Co-operative Group which - as a supermarket - is involved in the retail of factory farmed meat, the retail of tobacco and other activities attracting civil society criticism. This is why the Co-operative Group has a lower ethiscore of 7/20. Although, as a member of the Co-operative group, you can have a say on this.
  • Executives in the group's banks have tended to be paid significant amounts (though not as much as their counterparts in bigger high-street banks).
  • Smile does not offer banking services to business – but businesses can bank with The Co-operative Bank

Practical Points

SECURITY: The Co-operative, Smile and Britannia offer the same guarantee as the high street banks. They are part of the Financial Services Compensation Scheme (FSCS) which guarantees 100% of the first £85,000 of any eligible deposits for individuals and up to £170,000 to couples with a joint account.

Move Your Money: The services that the Co-operative Bank offers, and how to apply for them are set out clearly on their website. You could also go to your local branch or call them on 08457 212 212.

If you're moving your current account, the Co-operative Bank has a specialist switching team to help you. They can keep you updated with the whole process of switching by text if you want. The bank offers £1000 interest free overdraft during the switching process to ensure that no important payments are missed. If you visit a branch to open an account you will probably need to take two forms of identification with you - one with a photograph (e.g. a passport), the other a proof of address (e.g. an old bank statement or utility bill). If you have any questions, call them.

Charity Bank (link)

Ethical Consumer score = 16 / 20

    What's To Like?

  • Charity Bank is a bank authorised by the Financial Services Authority that is also a charity, which means it doesn’t compromise on social goals for shareholder profit.
  • It only lends savers money to charities and social enterprises with a positive social purpose, including those unable to access finance from high street banks.
  • Charity Bank is committed to openly sharing how it uses customers’ money - publishing details of every loan it makes.

    The Downside

  • Offers savings products and loans only, not current accounts for individuals or businesses.
  • There are no branches. Access by internet, phone and post.

Practical Points

Security: Charity Bank offers the same guarantee as the high street banks. They are part of the Financial Services Compensation Scheme (FSCS) which guarantees 100% of the first £85,000 of any eligible deposits for individuals and up to £170,000 to couples with a joint account.

Move Your Money: Visit their website here to find out about the savings accounts that Charity Banks offers and to download the relevant application forms. If you want to talk to them first, or would like information by post you can call them on 01732 774040.

Triodos (link)

Ethical Consumer score = 15.5 / 20

    What's To Like?

  • Triodos Bank is one of the world's leading sustainable banks. Their mission is to make money work for positive social, environmental and cultural change. For this reason, they only lending money to people and organisations making a positive impact - culturally, socially and environmentally.
  • They have been key to financing renewables in the UK, particularly wind.
  • Triodos actively chooses not to list on a stock exchange in order "to avoid a system that puts making as much profit as possible - or profit maximisation - above all else."
  • Triodos is completely open about how they use their customers' money. They have even developed a tool to aid transparency.

    The Downside

  • Offers savings products and loans only, not current accounts for individuals. Triodos does offer current accounts for social ventures and charities though. Triodos may be able to offer personal current accounts in the UK in the future, as it does offer a personal current account in the Netherlands and Spain, where its business is larger and even offers a branch network.
  • There are no branches in the UK. You can access your account by internet, phone and post.

Practical Points

Security: Triodos operates under a license from the Dutch Central Bank and so is covered by the Dutch deposit guarantee scheme, which guarantees an amount not exceeding €100,000 per person per institution.

Move Your Money: MOVE YOUR MONEY: Explore the range of savings products Triodos offers and how to open an account with them on their website here. If you have any specific questions call 0800 328 2181. You can also keep in touch by subscribing to their quarterly newsletter, The Colour of Money.

Unity Trust Bank (link)

    What's To Like?

  • Unity Trust is a specialist bank for civil society, social enterprises, community interest companies, councils and trade unions.
  • Although Unity Trust is not a mutual the main shareholders are trade unions and the Co-operative Bank so profits go back into civil society.
  • It has a clear investment policy which respects human rights and is especially concerned with labour and discrimination.

    The Downside

  • It offers a full range of banking services but only to certain types of organisations (civil society, social enterprises, community interest companies, councils and trade unions), not individuals.
  • There are no branches. Access by internet, phone and post.

Practical Points

Security: Unity Trust Bank offers the same guarantee as the high street banks. They are part of the Financial Services Compensation Scheme (FSCS) which guarantees 100% of the first £85,000 of any eligible deposits for individuals and up to £170,000 to couples with a joint account.

Move Your Money Visit their website to find out what services Unity Trust Bank can offer your organisation. You can also call them on 0845 140 1000.

Ecology Building Society (link)

Ethical Consumer score = 16 / 20

    What's To Like?

  • Ecology Building Society is a building society with an environmental mission. Deposits from savers are used to fund mortgages that promote environmentally sustainable development and communities. (Note that it is a building society, not a bank, but we thought it deserved a special mention in the ethical banks section because of its unique ethical and environmental mission.)

    The Downside

  • Offers savings products and loans only, not current accounts for individuals or businesses.
  • There are no branches. You can access your savings account by phone and post.

Practical Points

Security: Ecology Building Society offers the same guarantee as the high street banks. They are part of the Financial Services Compensation Scheme (FSCS) which guarantees 100% of the first £85,000 of any eligible deposits for individuals and up to £170,000 to couples with a joint account.

Move Your Money: You can find information about the savings accounts Ecology Building Society offers on the savings pages of their website or by downloading a brochure. You'll find application forms to open an account with them on their website too. You can call them with any questions and to request an information pack on either 0845 674 55 66 or 01535 650 770.

Islamic Banking

Islamic Bank of Britain's Ethical Consumer score = 11 / 20

This page on Islamic banking is summarised from a longer article appearing in the www.ethicalconsumer.org Bank Current Accounts Report in Feburary 2012. Arwa Aburawa is a freelance journalist who specialises in environmental issues, the Middle East and Islam-related topics.

    What's To Like?

  • Islamic finance is based on Islamic law (Shariah), which prohibits charging interest and making investments in industries related to alcohol, pork, pornography, gambling and generally tobacco and armaments too.
  • At the heart of Islamic finance is the principle of profit-sharing and risk-sharing between the bank and the customer, as well as the minimisation of speculation to encourage transparency. This means that for those who deposit money, the risk of any investment is shared between the depositor and the bank and any profits are divided between them at an agreed ratio.
  • Islamic banks structure Shariah-compliant borrowing solutions too. For example, to help customers purchase a property, the customer and the Bank buy the property jointly. The monthly payment increases the customer’s share in the property and includes rent on the share that the Bank owns. At the end of the term the customer will own the property outright.
  • Islamic banking is open to Muslims and non-Muslims alike and since the financial crisis has grown in popularity due to the perceived aversion of Islamic banks to risky speculation.

    The Downside

  • Whilst Islamic banking institutions have strong social ethical codes, they do not necessarily focus on the environmental impacts of businesses they invest in.
  • Islamic finance in the UK is a relatively new and small sector and that means it comes with its own risks.
  • Mutuality has been sidelined as a viable structure for Islamic finance and some have also criticised Islamic banking for not focusing enough on providing financial services to the poor.

Practical Points

Security: Islamic banking institutions in the UK are authorised by the Financial Services Authority and the Islamic Bank of Britain is a member of the Financial Services Compensation Scheme, which guarantees 100% of the first £85,000 deposited per person per firm.

Move Your Money: There are still limited numbers of Islamic retail banking institutions. The Islamic Bank of Britain has branches in Birmingham, Manchester, London and Leicester and is the only full-service shariah-compliant retail bank in the UK. The United National Bank offers Islamic mortgages. Some conventional banks such as HSBC and Lloyds TSB also provide financial products according to the principles of Islamic finance.

Building Societies

  • Mutual organisations that provide banking services, run by and for members.
  • Main purpose is the delivery of savings and mortgages.
  • Some building societies provide a full range of banking services.
  • Competitive rates of interest.
  • Savings guaranteed to same level as at high street banks.
  • There are 47 building societies and some have branches across the UK.
  • Examples: Nationwide and Coventry Building Society

Building Societies are mutual organisations. This means that they are owned by and run for the benefit of their members, who are usually also the customers.

Building societies offer many of the services offered by banks, including current and savings accounts, but their main purpose is to offer savings and mortgages. By law, a minimum of 75% of their lending has to be secured against residential property.

They often have a strong regional identity and tend to be closely involved with their local communities.

There are 47 building societies in the UK. Some are large organisations offering a wide range of services including current accounts, savings, insurance and credit cards. These will also have branches around the country, access to cash machine networks and offer internet and telephone banking too. Click here to find a Building Society.

    What's To Like?

  • They're owned by customers, which means when you open an account you get a say in the way they're run. Each member has one vote, regardless of how much money they have invested or borrowed.
  • According to a report commissioned by the Building Societies Association building societies score 45% higher than banks on value for money and 39% higher on treating customers fairly.
  • Building societies also beat the high street banks on all measures of customer satisfaction.
  • They have tended to offer consistently attractive rates of interest for savers, according to Which? magazine. Some high street banks, by contrast, offer high rates initially and then drop them.
  • Unlike ordinary banks they have no external shareholders so profits are either redistributed to the members or reinvested back into the business. This helps ensure competitive rates of interest for savers and borrowers.
  • They must raise at least 50% of their funding from members, which is low risk and tends to be for the long term. Typically, they raise 70% in this way. High street banks on the other hand turn to money markets to borrow and lend for short periods of time. Excessive reliance on the money markets, and complex financial instruments led to Lehman Brothers, for example, going bust.

    The Downside

  • The UK property market is hugely inflated because most lending recently has been directed towards home buyers – and building societies are just as responsible as banks.
  • Some of the larger building societies pay large rewards to executives.
  • Some building societies lend to companies with dubious ethics and have subsidiaries in tax havens, according to research by Ethical Consumer magazine.

Practical Points

Security: Like high street banks, building societies are part of the Financial Services Compensation Scheme (FSCS) which guarantees 100% of the first £85,000 of any eligible deposits for individuals, and up to £170,000 to couples with a joint account.

Move Your Money: See a list of all building societies and their contact details here. Visit their website or call them up to find out what services they provide and how to apply for an account. In general you will be able to apply online, in a branch or by post. If you visit a branch to open an account you will probably need to take two forms of identification with you - one with a photograph (e.g. a passport), the other a proof of address (e.g. an old bank statement or utility bill). If you have any questions, call them.

The building societies that offer current accounts are:

Credit Unions

  • Co-operatives that provide banking services, owned and run by members.
  • All the money the bank gives out will go to the local community, so your deposits will help people in your local community.
  • Main purpose to provide saving and loans.
  • Some also offer current accounts.
  • Competitive rates of interest. The interest that can be charged on loans is capped by law.
  • Savings guaranteed to same level as at high street banks.
  • There are about 580 credit unions in the UK.
  • Examples: London Mutual, Bristol Credit Union and Manchester Credit Union

Credit unions are financial co-operatives. This means they're owned by, and run for, the benefit of their members, who are usually also the customers. Credit Unions are very common in other countries, including the USA, Ireland and Australia.

Credit unions have a strong regional identity and tend to be closely involved with their local communities because membership is traditionally determined by a common bond. Some credit unions serve people living or working in a particular area, while others are for members of trade or faith groups.

This means, by joining a credit union, you are putting your money in a community. It will be invested in the needs of that community - for example, it might be invested in a loan to one of your neighbours.

The main purpose of credit unions is to provide saving and borrowing services although some of the larger ones also provide current accounts, or debit cards that give access to ATM networks. Many credit unions offer internet and telephone banking.

There are about 580 credit unions in the UK. Most of them can be found here. To see all credit unions please see below.

    What's to like?

  • They're owned by members, which means you have real influence in the way they're run. Every member has one vote.
  • With no external shareholders extracting profits, credit unions can provide cheaper loans and more attractive rates for savers. In the big high-street banks, by contrast, pressure to generate dividends for shareholders leads to mis-selling of financial products to customers.
  • Managers at credit unions are usually paid a standard salary, without the lavish bonuses and other rewards of their counterparts in high-street banks. The board comprises elected members, sitting voluntarily and for no salary.
  • Credit unions lend out most of their savings to other members. The remainder is invested into short-term savings, often (but not always) with ethical banks. This model tends to make credit unions very stable, compared with big banks that routinely speculate with complex financial instruments.
  • Saving in credit unions can be regarded as an ethical investment because money you put in allows the credit union to make loans to people in the local community who might otherwise be prey to loan sharks or high cost lenders.
  • Most credit unions can provide loans of up to £15,000. The interest charged on loans is capped by law, at an APR of 26.8%. In practice, many loans are cheaper. By comparison, the leading home credit lender, Provident Financial, advertises typical APR of 272% and the leading online pay day lender, Wonga, advertises its rate at 4,000% APR. Credit unions don't charge set up fees or early redemption fees.

    The Downside

  • Although there are many credit unions (about 580) some parts of the country are better served than others.
  • It might be difficult to join a credit union as a business. Companies, organisations and associations are allowed to join, but must not make up more than 10 per cent of the union's membership, or account for more than 10 per cent of its loans.
  • If they offer a current account, you may be charged for it - but the fees are transparent, regular and the same for everyone. By comparison, big banks offer "free" accounts that are largely paid for by poorer customers being charged for overdrafts and missed payment penalties.

Practical Points

Security: Credit unions offer the same guarantee as the high street banks. They are part of the Financial Services Compensation Scheme (FSCS) which guarantees 100% of the first £85,000 of any eligible deposits for individuals and up to £170,000 to couples with a joint account. In some credit unions, life insurance is built into loans: if you die before the loan is paid off, the insurance will repay the remainder.

Move Your Money: If you live in England, Wales or Scotland, you can find your local credit union and their contact details using this search function.

When you have found your local credit union(s), visit their website or call them up to find out what services they provide and how to become a member. In general you can join simply by filling in an application form online, in a branch or by post. In most cases you will be required to provide two forms of ID - one with a photograph (e.g. a passport), the other a proof of address (e.g. an old bank statement or utility bill). If you have any questions, call them.

Find a list of 24 credit unions that offer current accounts here.

CDFIs

Community Development Finance Institutions

  • Small, local organisations whose primary mission is to support communities.
  • Lend money to small businesses, social enterprises and charities.
  • Provide affordable finance that would otherwise not be available.
  • By investing your money in a CDFI you may qualify for tax relief.
  • Example: London Rebuilding Society

    What's to like?

  • Community Development Finance Institutions (CDFIs) are small, local organisations whose primary mission is to support communities by providing affordable finance that would otherwise not be available.
  • CDFIs lend money to small businesses, social enterprises and charities, and individuals who struggle to get finance from high street banks.
  • Each CDFI is different, although most do not take deposits by offering current or savings accounts. They can be a good source of finance and can also be a good way to invest your money as you may qualify for community interest tax relief.

    The Downside

  • CDFIs tend to be very small in the UK and may not offer the services you need.
  • CDFIs are local organisations an some areas may be better served than others.

Practical Points

To find out more about CDFIs or what your local CDFI offers visit the Community Development Finance Association (CDFA) at www.findingfinance.org.uk.

Example: The London Rebuilding Society is a social enterprise that works to provide finance for individuals and businesses that "show social, ethical or environmental benefit" in the Greater London area. Two innovative funds that they have are a Mutual Aid Fund, designed specifically to provide people from migrant communities with access to credit, and a Home Improvement Service, which helps home owners with low income to finance home renovation.

Alternative Ways to Borrow and Lend

  • Innovative schemes that enable you to lend and borrow directly from other individuals.
  • You can choose directly where your money goes.
  • Can offer higher saving rates and lower borrowing costs because the middleman is cut out.
  • Provide a way to raise funds for projects that would otherwise find it difficult to borrow.
  • Internet-based.
  • Examples: Zopa and Kiva

There is a range of different platforms available that enable you to lend and borrow directly from other individuals. Some, like Kiva and Buzzbnk, have a more charitable focus and provide a way to raise funds for projects that may otherwise find it difficult to borrow. They also enable you to choose directly where your money will go, allowing you to secure ethical and social benefits. Others, like Zopa, focus on financial investments and profit, and can offer higher saving rates and lower borrowing costs because the middleman is cut out.

Some of these companies use fairly new business models such as "peer 2 peer" lending and "crowd funding". As the banks have all but stopped lending, small organisations are increasingly turning to these companies as a source of funding.

These platforms are only a way of enabling people to borrow and lend from one another without the intermediation of a bank. They do not offer a full range of banking services. All of these platforms are internet based.

Practical Points

Security: These schemes are investments, not savings, with no guarantee should the organisation or project fail.

Examples

  • Zopa (link)

    A market place where savers and borrowers can decide who they want to transact with depending on risk, returns and costs. Whilst Zopa does charge fees, it advertises higher saving rates and lower borrowing costs because the middleman is cut out.

    Zopa is part of the P2P Finance Association, which has two other members - Funding Circle and Rate Setter.

  • RateSetter (link)

    RateSetter is a peer-to-peer finance site which matches prime consumer borrowers with savers looking for a better deal. The company has developed a unique system to step in and compensate Savers when bad debt occurs. Called the Provision Fund it has ensured that every saver has received every penny due in capital and interest – a first in the world of peer-to-peer finance. RateSetter has also developed more flexible products than its rivals, including a monthly access account, and a 1 Year Bond.

  • Kiva (link)

    Kiva uses peer 2 peer technology to match lenders to borrowers according to their philanthropic preferences. This is a way of using your savings to help people, with a high chance of getting money back.

    Kiva is not-for-profit and does not take a cut, which means that 100% of money offered goes directly towards funding loans. Lenders don't earn money, but receive email updates about how their money is helping and how the borrower is doing.

  • Buzzbnk (link)

    Buzzbnk is an online marketplace that connects social ventures with backers, supporters and fans. Backers support initiatives they like by pledging money, time or both and spread the word to their own social networks and communities. In return for their support backers can receive gifts depending on the type of project, such as event tickets.