Volume 3 Issue 1
Spring 1998
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GÆIA Newsletter |
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Volume 3 Issue 1
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Spring 1998
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| The Growth of GÆIA
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| GÆIA has recently
absorbed the businesses of two other firms of independent financial advisers
specialising in ethical and environmental investment.
In November 1997 an agreement was signed with Birmingham based Tree of Life Financial Services while the London firm Green Door came into the fold just a few weeks later. |
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| Tree of Life
The addition of Tree of Life means that GÆIA now has an even greater involvement in both corporate and voluntary sector pensions and other benefits.GÆIA is strengthening its links with businesses as they take a greater interest in their social responsibilities and their investments. |
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| The principals of GÆIA and Tree of Life, Brigid Benson and Jonathon Clark have been colleagues in the financial services profession for the last eight years and have been looking for some time at how they could best co-operate to provide the best service to their clients. |
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| Under the terms of the agreement Brigid and her consultants,
Alistair Elliott and Peter
Robinson, will provide advice in all the existing areas such as
investment, pensions, life cover and mortgages. Jonathon will be closely
involved with ensuring a smooth transition for Tree of Life clients (and
introducing new clients). He will also be developing a wider range of financial
and management consultancy services as well a producing regular newsletters
and information bulletins to keep clients up to date.
Tree of Life’s Midlands clients will be well served by Peter Robinson who joined GÆIA in September 1997. |
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Green Door
Ian Mitchell, who founded Green Door Associates, is no longer an adviser but will retain contact with GÆIA as an introducer of new business. The increase in regulations introduced over the last few years has made it more difficult for small practices to sustain the overheads and time involved. By combining the clients of three firms under one roof, the administration will be streamlined. |
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| These new arrangements make GÆIA one of the most significant firms of ethical specialist independent financial advisers in the UK. As Principal, Brigid Benson commented "We are playing our part in an area that is growing strongly as the public becomes more aware that they can arrange their financial affairs to reflect the values which they try to practice in their daily lives." | Administration
With the additional clients now being serviced by GÆIA, the experience and knowledge built up by the administrative staff will be a great asset. On the telephones and oiling the admin. wheels are Anita Sidebottom and Lesley Jackson while we also welcome Assistant Administrator Becky Potts who joined in December 1997. |
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With
the 5th April only a few days away, you still have time to make those
key end of Tax Year decisions.
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Personal Equity Plans
The Budget essentially allows you to keep all existing PEPs. |
Not abolished yet and still a good idea.
Initial suggestions are that up to £50,000 of investment in PEPs can be transferred into the new Individual Savings Accounts when PEPs are abolished in 1999. If you don’t yet hold that amount then do use your allocation for tax years 1997-98 and l998-99, up to £6,000 in a general PEP and £3,000 in a single company PEP. |
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Personal Pension Planning
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Single lump sum payments need to be made by 5th April
to qualify for tax relief in 1997-98 and to obtain tax relief in prior
years if eligible.
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Pension Schemes for Companies,
Organisations & Co-operatives
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Start or increase your company’s contributions - lower your tax bill
and add a valuable benefit for employees.
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Free-Standing Additional Voluntary
Contributions (FSAVC/AVCs)
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Unlike personal pensions, the allowances disappear once you pass the end of the tax year. Up to 15% of your salary may be paid into an FSAVC less any payments you make to your employer’s scheme. If you are making regular payments to an FSAVC, you can add a single payment. BUT - unlike a personal pension you cannot carry the allowance forward or back to previous tax years. | |||
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The Effect on Pensions
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Since the July Budget, pension funds can no longer reclaim the 20% Advance Corporation Tax (ACT) on the dividends of shares they hold. This gave them higher growth on their investments than life assurance funds, unit trusts or shares held directly by an individual. This change means that the projected funds of personal pensions and Free-standing AVCs are likely to be slightly less than was shown on the illustrations when the plans were started. | |
| Likewise with a "money purchase" occupational scheme or Group Personal
Pension, employers and employees may consider making additional payments
along with yearly salary reviews, as several of our schemes have recently
done.
The most effective way of dealing with this shortfall is to increase contributions - and the sooner the better. The longer the term of the investment, the larger the fund at retirement. Income tax relief is still available on contributions to pensions within certain limits, so a pension still makes good sense. With basic rate tax at 23% and higher rate tax at 40% they are particularly good value for anyone with earnings which take them into the higher rate, as relief at this rate has not been abolished yet. |
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Mortgages
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The Chancellor, Gordon Brown’s latest reduction of the relief - to 10% of interest on the first £30,000 of the loan will cost mortgage holders about £10 per month. The real benefit has been eroded by the years in which the previous government refused to increase the relief as house prices soared. | |
| MIRAS may finally be abolished by this government. This makes sense
if the extra revenue is directed at helping the homeless and the millions
in damp, energy-inefficient housing in the UK.
We can advise you on the most appropriate repayment method for your circumstances and suggest competitive lenders. We subscribe to
the newly introduced Code for Mortgage Lenders.
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Individual Savings
Account
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The government has announced its intention to abolish PEPs and TESSAs from April 1999 and replace them with a new account called the ISA - Individual Savings Account. | |
Initial limits may be £50,000 of PEPs which can be transferred
tax-free, have inevitably raised objections from the financial community
although the number of people who are affected is probably quite small.
The final details have not yet been decided by the government.
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The majority of Ethical Funds that we have been recommending continue to perform well. Those that invest largely in
smaller companies may not have shown high growth over the last year, but
since launch many have still outperformed the average fund in their sector.
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| Developments at NPI | The NPI Global Care Pension Managed Fund has shown outstanding performance since launch, currently standing 5th over 3 years in the Money Management Pension Fund statistics February 1998. | |
| The Global Care team at NPI continue to expand the range of funds to cater for the different needs - income/risk levels of ethical investors. | NPI have now made both Global Care and Global Care Managed available
through a single premium investment bond, particularly appropriate if regular
withdrawals from capital are required, as well as a less volatile fund.
NPI have recently restructured their pensions contracts to reduce the charges - more details in the next issue. |
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Standard Life
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WE ARE DELIGHTED that Standard Life - one of the largest remaining mutuals in the UK - has at last launched an Ethical Unit Trust. | |
| Standard Life launches UK Ethical Unit trust | Ethical Unit Trust
The fund proposes a familiar list of negative and positive criteria.
Companies causing pollution, testing on animals or manufacturing armaments
will not be included. The fund will favour companies which contribute to
human life or the environment.
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Standard Life Bank
Standard Life have also recently launched a Direct (and Instant) Access Savings Account. This is very good news for large and small savers. You can save from £1 up to £5,000 and still earn 6.96% gross interest with slightly higher rates for larger amounts. |
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Friends Provident
Stewardship Funds
Still a Winner! |
The Stewardship Pension fund continues to show consistent, outstanding performance, averaging 18.3% p.a. since launch according to Reuters Hindsight in February 1998. | |
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| NPI have extended the discount on the initial charge to their unit trusts and PEPs until March 1999. An initial charge of 2.5% against an industry average of around 5% represents good value. | ||
| The 1% discount on the Jupiter Ecology Fund PEP has been extended to June 1998. | ||
| Standard Life are offering a further 1% discount on the Initial charge until 15th May. | ||
| Credit Suisse Fellowship PEP are offering a 2% discount until 3rd April. | ||
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Addressing
Economic Inequality through Socially Responsible Investment
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| Many ethical
investors are concerned that their investments are not pro-active enough
nor helping to resolve economic inequality. For example many of Britain’s
inner cities still have very high levels of unemployment and the social
& economic deprivation that occurs when families and communities are
without work or well-paid work for long periods of time.
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Many communities and organisations
are addressing this problem both here and outside the UK.
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Launch of The Regenerating
Society Network
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Businesses and individuals living in poor communities find it difficult
to borrow money and access services from conventional banks and lenders.
Yet the money they currently spend will benefit companies and communities
elsewhere.
The newly launched Regenerating Society Network aims to share the knowledge already built up in Birmingham and other areas to work with organisations and businesses around the country that want to encourage self-employment, small housing projects, micro and social enterprises. When people are given the opportunity to invest in their local economy and those with greater resources give a helping hand, much can be achieved. |
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Triodos Bank
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The Triodos Bank (formerly known as Mercury Provident) goes
from strength to strength. We and many of our clients have been impressed
by the broad range of businesses and economic activities they have embraced
- too numerous to mention them all in detail but here are a few:
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The Organic Saver Account
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The Triodos Bank in partnership with the Soil Association has
launched the first UK savings account to finance organic foods and farming.
"Less than 1% of UK farmland is under organic management and we import
70% of our organic foods. Demand for organic food is at a peak." Says Soil
Association Director Patrick Holden.
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Investing in the
Inner City
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Aston Reinvestment Trust (ART) was formally launched in June 1997
with the initial aim of raising £500,000 to provide finance for inner
city businesses in the Birmingham area. So far, £320,000 has
been raised and hopes are high that the extra £180,000 will arrive
by March to achieve the first goal.
Typical loans made by ART are to viable businesses which provide social or economic benefit to local people but with an insufficient track record to satisfy conventional banks. Other recipients will include affordable housing projects, local charities and organisations in the business or voluntary sector who need loans to achieve energy savings. Investing in ART is an excellent idea for those who want to see their money work for social justice. Investment can be from £250 upwards. |
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| Peter joined GÆIA in September 1997 after six years with Friends
Provident and two years as an independent financial adviser. His years
at Friends Provident made him aware of the strong demand for ethically
based financial advice consistent with his own background.
Peter holds an honours degree in Politics and Sociology from Warwick University and a diploma from Ruskin College, Oxford. He has been a member of the Labour Party for the last fifteen years and both he and his wife, Nicky, are vegetarian. However, he is happy to enjoy a pint or two of beer provided, like the screening criteria in some ethical funds, that it constitutes no more than 10% of his total intake. |
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| Congratulations to Alistair Elliott and his wife Lucille on the birth of their daughter, Savannah. She arrived in September - more than two months early, weighing barely 1 kg (2 lbs). We’re glad to report that she is now home from hospital and that the whole family are fine, if a little frazzled! | |
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Show me
your writing and I’ll tell you when I was born!
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When Brigid and Jonathon started to talk about combining their businesses they didn’t realise their common interests extended to alternative methods of business consultancy. Graphology (a long time hobby of Brigid’s) and astrology (Jonathon’s other profession) are both widely used business tools in the USA and show signs of gaining ground in the UK according to a recent article in The Guardian. |
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From Little
Acorns...
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In 1996, GÆIA was one of the first organisations to send a
donation to Women For Sustainable Development who wanted money for a Women’s
Agricultural Co-operative in India.
We were delighted to hear the project was so successful that an application is now being made to the World Bank to fund six hundred villages. From one co-op to six hundred villages in two years - that’s the sort of growth we like! |
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Ice Cream
in Vermont
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The history of Ben & Jerry’s twenty years in business is now
available. It is a fascinating story for anyone interested in the nitty
gritty decisions that face the proprietors of what they term a "values
led business."
From the early post-hippie days of making and selling ice cream in an old garage in Vermont and finding jobs for their mates, they have developed into a couple of entrepreneurs as cute as the cookies in their cookie-dough ice cream with a real sense of purpose. They realised that the profit they gave away in charitable donations was only a fraction of the influence they could exert through the way they purchased their raw materials. This example shows the transition from dreams to reality with the dreams still intact. Highly recommended.
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Self Assessment
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If you haven’t yet submitted your tax return for 1996-97 then, unfortunately, you have probably already incurred a £100 fine. To avoid further penalties, make sure the return is sent to the Inland Revenue as soon as possible. |
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Join the
ETA
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The Environmental Transport Association provides the usual range of services for the motorist and cyclist such as breakdown recovery, home rescue and legal cover but the ETA is the only road rescue service founded to campaign for an environmentally sustainable transport policy in the UK. |
| To contact us | ||||
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Post
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28 Burlington Road
Manchester M20 4QA |
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Telephone/Fax
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0161 434 4681 | |||
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Web
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www.gaeia.u-net.com | |||
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Email
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brigid@gaeia.u-net.com | |||
| Administration | ||||
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Lesley Jackson
Anita Sidebottom
Becky Potts
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| Advisers | Mobile or home | |||
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Brigid Benson
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0973 414184 | |||
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Alistair Elliott
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0973 872819 | |||
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Peter Robinson
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01902 340344 | |||
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Jonathon Clark
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0121 427 8250 | |||