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Investment Management
Getting your money to grow and work hard is not easy in today's ever-changing market. Low interest rates, inflation, tax and investment risk are crucial areas to consider when making any investment.
We understand how these factors can undermine your financial security and potentially leave you vulnerable to unexpected life events. We want to see your money grow and provide you with the best possible advice whilst remaining true to your personal strategy and attitude to risk.
Investing for growth or income
Savings are the core to your financial security, we invest according to the risk you are willing to take and look to maximise the returns on your investment. Whether you want to invest in active funds, passive funds or within a Discretionary Fund Management system, we will advise you on the best course of action according to your personal circumstances. Include inflation.
Maximising Tax Allowances
Paying too much tax on your savings can have a serious impact on the returns being achieved. The government have recently announced changes to encourage people to save both the ISA limits and the amount of cash that can be invested in to ISAs. Maximising tax allowances, isn’t just about investing in ISA’s its strategic planning and implementation across the whole sector.
Saving for education whilst remaining on track for retirement is a complex area but with the right planning, we can help you access the right money at the right time. The advice process will show you how you can achieve both and provide you with a detailed plan.
For example, you anticipate that in say 12 years your son/daughter will be going to university for 3 years and in today’s money the fees are about £9,000 so you will need to save £27,000. You are not sure how much fees are likely to increase in the future but, you also need to save for a comfortable retirement. Following an in depth consultation our adviser will produce a plan to show you what you will need to do to achieve your goals.
All about ISAs
Since the Budget in 2014 the ISA has now been rebranded the NISA.
Effectively there is no difference between the Former Cash ISA and Stocks and Shares ISA for contribution limits. Each tax year an individual can invest up to £15,240 (correct as of Tax year 2016/2017) into a NISA. This will increase to £20,000 for the tax year 2017/2018. This can either be held on cash Deposits or Stocks and Shares. You can make this as lump sum deposits or save regularly.
CASH ISA
A cash Deposit is where the money is held in cash usually with a Bank or Building Society. You receive a rate of interest dependent upon the “deal” being offered by the Bank. The interest is gross and there is no tax paid on the interest irrespective of your tax position.
The plus side of a cash ISA is there is no risk to the capital, meaning your capital will never go down in value.
However, due to low interest rates the spending power of your savings may be reduced over time due to the effects of inflation.
STOCKS & SHARES ISA
A Stocks and Shares investment is where your money is generally invested into a pooled investment fund. This is usually invested via an Insurance Company or Investment Management Firm.
Funds chosen can vary in risk from very low to very high. You would need to be sure that you choose funds that meet the risk you are willing or prepared to take.
According to FE analytics 2017 the fund universe has 2843 funds from which to choose. So we would certainly recommend advice is required in this area.
The plus side is that over the medium to longer term you can potentially achieve higher returns than that of cash deposits which means there is the potential for growth above inflation.
However, there is risk to capital, investment funds can fall as well as rise. So, your investment may be worth less than you paid in.
The growth is tax free irrespective of your tax position. The only tax paid is internally which is a 10% tax credit on any dividend income held within equity funds. Fixed Interest and Bond Funds are not liable to a tax charge within the investment.
JUNIOR ISA (JISA)
Your child can have a Junior ISA if they:
Are under 18, live in the UK and weren’t entitled to a Child Trust Fund (CTF) account. However, sine April 2015 you are permitted to transfer your CTF to a Junior ISA.
Your child can’t get a Junior ISA if they’re eligible for a CTF account.
There are 2 types of Junior ISA:
A cash Junior ISA, which means you won’t pay tax on interest on the cash you save.
A stocks and shares Junior ISA, which means your cash is invested and you won’t pay tax on any capital growth or dividends you receive.
Your child can have one or both types of Junior ISA.
You can pay up to £4080 per tax year (year 2016/2017 limit) into a Junior ISA for your child.
HELP TO BUY ISA
The “Help to buy ISA” is a type of cash ISA for first-time buyers, which offers a Government bonus when investors use their savings to purchase their first home. For every £200 that a first-time buyer saves, there is a £50 bonus payment up to a maximum of £3000 on £12,000 of savings. The bonus is available for purchases of homes up to £450,000 in London and up to £250,000 elsewhere.
The bonus only applies for home purchase. Savers have access to their own money and are able to withdraw funds form their account if they need them for any other purpose. The maximum initial deposit is £1,000 and the maximum monthly saving thereafter is £200.
LIFETIME ISA
The Lifetime ISA, which is Available from April 2017 for adults under the age of 40, is a new way of saving for a first home and retirement. There will be an annual contribution limit of £4,000 and savers will receive a 25% Government bonus, i.e. a £1,000 bonus for every £4,000 contributed before the saver’s 50th birthday.
The savings and the bonus can be used towards a deposit on a first home worth up to £450,000 anywhere in the UK. Savers with a help to buy ISA can transfer their savings into their lifetime ISA or continue to save in both, although they will only be able to use the bonus from one to buy a house.
If the saver chooses to save for retirement, then after their 60th birthday they can take out all of their savings, including the bonus, tax free. If they withdraw any of the money before they turn 60, with the exception of money to buy their first home, they will lose their Government bonus and any interest or growth on this and will have to pay a 5% charge.