Pensions – definitions – Ethical funds

Ethical funds are a wide range of funds that either screen out ‘bad guys’ such as arms manufacturers and tobacco companies or pick ‘good guys’ for their ethical credentials, such as good employment or environmental practices. In 1999, just five per cent of defined contribution funds offered ethical funds, in 2007 it was 38 per cent. 

This is expected to grow because under government proposals for the new personal account system for automatically enrolling employees into pensions from 2012, ethical funds must be made available.

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