SAVINGS & INVESTMENTS

Financial planning is an all encompassing phrase that means nothing unless you consider the individual components that are required to determine a sound financial planning strategy. 

As part of a comprehensive financial planning service, we winvestment.jpgill consider details of your existing finances and arrangements and then complement them with a practice action plan, which should enable you to generate tax efficient wealth in the future. 

As specialist independent advisers we are well versed in assimilating and providing solutions for your needs – often with a busy lifestyle, the time and effort required to do this is not available without outside assistance to make all the arrangements for you.

Savings are all the same but there are three crucial factors that separate them and determine which are best for you. These are:

  • Charges;
  • Return;
  • Taxation.
 

Efficient tax planning to make use of tax allowances and investment tax breaks should be the starting point for any savings plan.

ISAs

By saving through an ISA you can invest in a variety of assets from low risk cash and government bonds, to medium and high risk equities and even property. Each individual can only own one ISA per tax year which can be Cash and/or Stocks and Shares.

  • The annual investment allowance is currently GBP 10,200, of which GBP 5,100 can be held within a Cash ISA each year or the whole GBP 10,200 can be invested in Stocks and Shares.
  • ISAs are tax efficient, very valuable if you are a higher rate tax payer
  • There is no minimum period of investment

 

OEICs, UNIT TRUSTS, INVESTMENT BONDS

Investing or saving money in cash would be perfectly fine if it wasn't for one thing, INFLATION. Over the long term inflation erodes the spending power of your savings, maybe just sitting and accruing interest in your bank or building society account. However, the danger with this is that with interest rates as low as they are, it is almost IMPOSSIBLE to get an annual return, taking account of the income tax due and annual investment_research.jpeginflation. So the chances are you will be making a negative return.

To combat the effect of inflation on your savings or investments, the use of investment vehicles such as ISAs, OEICs, unit trusts or investment bonds can offer positive returns far in excess of inflation. There is obviously higher risk involved, hence the higher rewards. But there are vehicles and funds for very level of risk.

ISAs, OEICs, unit trusts and investment bonds are pooled investments meaning that your regular or lump sum investments are 'pooled' together with other investors and so enabling fund managers to invest in a wide variety of assets thus spreading and reducing the risk. This would not be feasible on an individual level because you would need a large amount of capital, time and market knowledge.

The value of your saving may go down as well as up and you may not get back what you invested.

 

 


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