Don't write off Sipps yet - there may be an ethical answer

Don't write off Sipps yet - there may be an ethical answer

Sipps (self-invested personal pensions) lost some of their lustre when the chancellor axed a tax break that would have allowed the well-off to use them to buy residential property on the cheap.

But many experts reckon they are still likely to prove very popular, particularly from April, when the rules governing pensions are relaxed.

A Sipp is a "do-it-yourself" pension plan which allows people to invest directly in shares, unit trusts, investment trusts, gilts and commercial property, all under one roof, and enjoy the same tax benefits that apply to personal pensions.

Last week, Norwich Union launched a new Sipp, while ethical private client investment manager Rathbone Greenbank Investments is preparing to unveil what it says is the first "green" Sipp.

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The Rathbone Greenbank Sipp, available from April 6, will reflect an individual investor's ethical criteria, so their money will be invested in companies and sectors that they want to support, and it will stay well away from those that the individual doesn't approve of.

It will allow people to put their money into individual stocks and shares, bonds and ethical funds run by other fund management firms. The set-up fee is £300 and the annual charge is 0.75%-1.25% per annum.

"We believe pensions are ideally suited for ethical investment as they are long-term investments, and it is over the long term that many of the issues our clients are concerned about become particularly important," says a company spokeswoman.

Rathbone Greenbank believes that companies helping to develop solutions to climate change, such as renewable energy, fuel cells and energy efficiency, are likely to be long-term winners financially.

It says companies operating in these areas include Scottish & Southern Energy, Johnson Matthey, which is a key supplier to the fuel cell industry, and Pilkington, which makes energy-efficient glass.

Other companies it has invested in include Organic Farm Foods, Britain's largest specialist supplier of organic fresh produce, and debt management company Debt Free Direct.

· Email: r.jones@guardian.co.uk

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