Savings and Investments

There are different ways of accumulating money and many different products available to help you achieve this. Some people regularly save a portion of their disposable income; others periodically invest lump sums using their tax-free allowances.

Every investor is unique with his or her own motivation to invest. Funding for their children’s future, a house purchase, accumulating retirement funds – whatever the reason, an assessment of individual circumstances, attitude to risk and personal financial goals is a necessity to tailor financial plans.

Topics covered in this section:

Why should you save?
Types of savings account
Child Trust Funds
Savings and investments calculators

Why should you save?

There are many demands on our cash in society today without having to worry about putting some extra aside for the future. However, saving should be a priority, for 2 reasons: in case of emergencies, and the need for a ‘nest egg’ in life’s big expenses such as weddings or house deposits.

Once you get into the habit of saving, you’ll find that your funds can build up surprisingly quickly…

Based on net interest of 5% per year, saving just £100 a month for 5 years totals almost £7,000. Due to the miracle of compound interest, saving the same amount over 10 years totals almost £16,000!

Types of savings account

There are many options available today, and it can be difficult to know which type of account is most suitable for you. There are 3 factors to bear in mind: how long can you tie up your cash for? Do you pay tax? Do you need quick access to your money?

Instant Access Accounts

Ideal for money you need access to quickly, for example your emergency fund.

Usually have a cash machine card for instant 24-hour access.

Notice Accounts

Usually have a better rate of interest than instant access accounts, but you cannot access your money immediately.

For example, with a 90-day notice account you’d have to wait 3 months if you wanted to withdraw money.
Cash Isa’s

Individual Savings Accounts (Isa’s) enable you to earn tax-free interest, but you can only invest £3,600 per tax year.

After tax, Isa’s usually have better rates than ordinary savings accounts.

Non-taxpayers should opt for the highest paying ordinary savings account because they receive their interest tax-free anyway.

Regular Savings Accounts

Usually offer the best interest rates due to annual bonuses offered to regular savers.

Number of withdrawals per year may be limited.

Can be started from as little as £5 per month.

Child Trust Funds

All children born after 31 August 2002 receive a voucher for £250 from the Government, which can be used to open a child trust fund (CTF). The interest received is tax free, but the money cannot be spent until the child reaches 18. The original sum can be topped up to an extra £1,200 a year – also tax free, and companies must accept regular savings from £10 per month.

Families that qualify for the full Child Tax Credit - namely those with a household income under a certain threshold - will receive an extra £250, with another payment made once the child reaches 7.

Save or Invest?

The CTF can be a deposit account, which earns interest, or an investment fund. If neither is specified, the Government will choose one; CTFs can be moved between providers at a later stage.

There are no restrictions on what can be done with the money in the account once a child reaches 18. But the Government is hopeful it will be used to give young adults a good financial start in life - for example, by helping to finance further education or to buy a home.

Savings Calculators

Watch how your long term savings can accumulate with this Savings calculator

See how much you could accumulate for your child with regular contributions in this Child Trust Fund Calculator

How long will you have to save before you have a million pounds? The millionare calculator will tell you.

WE CAN SAVE YOU MONEY!

Our investment service for lump sums can reduce the charges you normally pay when you invest directly. We can use portions of our commission, by offsetting the charges, to enhance your investment. These enhancements are in addition to any extra allocation or special bonus the particular company may be offering.

We have access to the whole market as Independent Financial Advisers.

Perhaps your existing investment plans are stale?

Not returning what you expected?

Do they need reviewed?

Is your money invested in a 'with profit' fund? Do you understand the possible implications of this type of fund on future bonuses?

Are you worried about possible Inheritance Tax implications?