Saving for a rainy day…

• Regular savings
  

Regular saving is a way of helping us meet future financial objectives by setting aside a portion of regular income to build up a lump sum in the future. There are a number of regular savings options available, such as deposit accounts, ISAs and Unit trusts. The right one for you will depend on your individual objectives and also your tax position.

 

• Lump sum investment
  

If you have a lump sum it is important that you make that money work hard for you to meet your objectives, such as capital growth or future income. There are a number of options available, and your attitude to risk is a key factor. The higher the level of risk you are willing to take with your investment typically means a higher potential return. Low risk investments such as deposit accounts are attractive to preserve capital, but if interest rates fall below inflation then the purchasing power of your money will be eroded. Often, a diversified portfolio of investments including shares, cash, property and fixed interest securities can provide the best solution.

 

You can invest a lump sum in many different ways. A portfolio of unit trusts is one option, or alternatively you could invest in an investment bond. This is technically a life assurance contract but carries only minimal life cover. The bond commences on the date the investment is made, and ceases on either the death of the life assured or when cashed in. There is no set investment period but it should be viewed as a medium to long term investment. Ideally it should be held for at least five years.

 

Your attitude to risk, investment horizon and tax position are some of the key factors to consider, and we would be happy to provide advice based on your personal circumstances.

 

Unit and share prices, interest and bonus rates and deposit returns can all fall as well as rise and are not guaranteed, and for that reason an investor may get back less than invested.

 

• Tax planning

If you’ve spent time and effort accumulating your wealth you’ll want to invest the same amount of energy in minimising your tax liabilities, and therefore increasing your growth and/or income potential. You can put in place arrangements to help mitigate against income tax, capital gains tax and inheritance tax, and by reviewing your personal situation you may be able to reduce the burden to you or your family.

 

Click here to request more information or a call from one of our advisers.