The value of the investment can go down as well as up and you may not get back as much as you put in.
Savings and investments are the two core components of any effective money-management strategy. Savings are a buffer against life’s knocks and bumps. Savings are also useful in terms of taking advantage of unexpected opportunities.
Investments are a means to ensure that investors have sufficient income for their lifestyle over the long term. One way of looking at this is that making the right investments ensures that you always have sufficient savings.
Since it’s important to have savings to hand, it makes sense to save in a tax-efficient manner. Generally speaking, the interest earned from savings accounts is treated as income and taxed accordingly.
The exception is if the savings are held in a “(N)ISA”. NISAs are the New, updated version of ISAs – Individual Savings Accounts. The two key changes between NISAs and the ISA products which have been available for several years are:
1. The tax-free allowance has been substantially raised. NB: investors should be aware that, as always, tax-benefits can and do change.
2. NISA holders are free to use their tax-free NISA allowance as either a savings vehicle (for cash) or an investment vehicle (for stocks and shares) or a combination of both as they see fit.
Please note that in one key point NISAs are identical to ISAs. The tax-free allowance is an amount you can deposit/invest over the whole year rather than the amount you can have in your NISA at the end of the year. In other words, if you make a withdrawal or cash in an investment and withdraw the proceeds then you can’t just replace the funds.
Those who have previously taken out ISAs will find that they are now NISAs. As we are currently in an ISA/NISA transition period, there may be some slight complications as HMRC and ISA/NISA providers make the necessary adjustments. Please speak to us if you feel you need assistance with these. Going forward, individuals will only be able open NISAs as ISAs will cease to exist.
The term investment covers a wide range of options, which means that it is vital to choose the right options(s) for each individual’s particular situation and preferences, for example tolerance for risk.
For many people getting the right wealth management advice is crucial to the effective management of their investments.
We can help you to choose the right investment plan for your financial goals, whatever they are. Regardless of whether you are looking for optimal growth or a stable income (or any combination of these two aims); we can help you find the right asset types at the right level of risk for you.
While investors have to appreciate that the value of investments can go down as well as up, we can work with you to determine how much of your portfolio should be dedicated to any one class of asset and suggest ways to diversify so as to spread your risk and increase your opportunities for investment success.
Wrap accounts are simply accounts which provide a secure, straightforward and convenient way to manage all your investment products from one central portal. Wrap accounts include both administrative tools and practical facilities such as the ability to trade with minimal fees. They may also have options for taking advantage of any tax relief available to investors.
For an independent consultation please contact us here