Investments & Savings

Investments and Savings

The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.

Tax treatment varies according to individual circumstances and is subject to change.

Tax Planning is not regulated by the Financial Conduct Authority.

Investors do not pay any personal tax on income or gains, but ISAs do pay unrecoverable tax on income from stocks and shares received by the ISA managers.

No-one knows how the political decisions on Brexit will affect investment returns.  However, we believe that staying invested in a wide range of investments is the sensible course of action for our clients, and taking advantage of things we do know, such as taking advantage of tax efficient savings, such as ISAs and other tax efficient investments.

Our fully qualified Financial Advisers, who provide financial advice local to Sutton Coldfield and across the region are here to help you.  Contact us to make an appointment. Please read on for information about ISAs and other investments.

ISAs And Other Ways To Save and Invest

Our Advisers provide financial advice in Lichfield and financial advice in Sutton Coldfield and across the region to maximise your return on the funds you invest via Four Oaks Financial Services. Through our practice clients also have access to the expertise of a Chartered Financial Planner and Fellow of the Personal Finance Society.

We have a holistic approach to financial advice using lifestyle financial planning to help your savings and investments grow in line with your life goals.

Investments and savings and how to invest tax-efficiently, will become an important part of your retirement planning in addition to pensions.

Don’t Cash In An Existing ISA Without Getting Financial Advice First

Many investors don’t know that it is possible to transfer an ISA from one to another.  It depends upon your individual needs, but this is often the best option as you will be able to invest the whole value of your existing ISA and continue to enjoy the tax benefits on the full amount.  If you cash in an ISA and then take the money to invest in a new ISA, you will only be able to invest up to £20,000 in the current tax year.

It is important to get financial advice on ISAs to make sure that your money is saved in ISAs that are right for you.  As your circumstances, priorities, thoughts and feelings change as the years go by the ISAs you saved in years ago may not be the right home for your money now.

Our Financial Advisers who provide financial advice in Sutton Coldfield and across the UK have access to more ISAs than you will find on the high street or online. They will be able to advise you on rates, management fees and any investment risks.

Tax Free Savings – ISAs for Adults

Each tax year the government gives each person an ISA allowance. For the tax year 2019/2020 the tax free allowance that is available to an adult is £20,000. You have until 5th April 2020 to use up this allowance. Or lose it. You cannot carry over your allowances for an ISA into the next tax year. If you are not sure whether or not you have used your allowances for the current tax year, speak to one of our Financial Advisers in Sutton Coldfield and throughout the Midlands.

If you have existing ISAs, please do not cash these in before you have received financial advice. Our Financial Advisers will review these to make sure they are working hard for you and you are getting the appropriate return on investment and may suggest you transfer your ISAs to new ones, as this is usually the most tax efficient way to re-invest these funds.

Attractive rates are often offered when you first take out an ISA but may well revert to lower interest rates after a period of time. So, it is important to review your investments from time to time. You may get a higher return on your investment if you were to transfer your existing ISA to a different one, but this will be discussed with you and any advice given will be appropriate to your personal circumstances and financial goals.

Tax Free Savings – ISAs for Children

This kind of ISA is called a Junior ISA. This is a tax-free account for children under the age of 18. For the tax year 2019/2020 the annual allowance for Junior ISAs is £4,368. So that means that no more than £4,368 can be invested in a Junior ISA in this tax year. However, this allowance cannot be carried over, you have to use all or part of this allowance by 5th April 2020.

We believe it is never too early to start a child’s financial education and a Junior ISA is a great way to get youngsters used to saving and understanding that not every investment works the same because this is a tax-free way to save, unlike a standard savings account. Contact us to make an appointment to see one of our Financial Advisers who give financial advice on ISAs in Sutton Coldfield and across the area.

A Junior ISA will be converted to an adult ISA when the child reaches the age of 18.

Different Kinds Of ISA Each Designed For A Specific Purpose

Cash ISAs, and Stocks & Shares ISAs

These are options for savers and investors. Cash ISAs are a safer option for money that you want to save tax-free but may need to access in the short-term.  Stocks & Shares ISAs are an alternative for money you want to invest for the longer term and for investors who are prepared to take an element of risk.

Junior ISAs

Junior ISAs are for children under the age of 18 who are living in the UK. The ISA allowance for junior ISAs for the tax year ending 5th April 2020 is £4,368.  Cash and Stocks & Shares ISAs are available, you can invest in one or both types.

Help To Buy ISAs

These are designed for people saving to buy a home.

Lifetime ISAs

These are designed for people who ae saving to buy a home or who wish to save until age 60.

Alternative Ways To Save – Investment Funds

Many of our investment clients say they want a balanced approach to savings. This means that they want to see their money grow by more than inflation but still want the peace of mind of having their money invested in a relatively cautious way. Please contact us to discuss your requirements.

Investment funds are available and over the longer term they’ve shown that they can provide investors with a return that beats inflation, sometimes by a significant amount. However, these funds are suitable for people who are prepared to take an element of risk with their longer-term savings and want to invest for five years or more.

As an example, we looked at one of the most popular types of balanced investments*. Of 146 funds, 113 of them had been running for more than five years. Over the last five years all of the 113 funds had made a return for their investors. The best performing fund had grown 59.3% over the five years and the worst performing fund in this sector had grown by 10.3%, which is well above the current level of inflation at around 3%. Note that investor charges will reduce the growth enjoyed.

*Source: Trustnet 6.6.18 – IA Mixed Investment 20-60% Shares sector

Other Investments & Savings

  • Corporate and government bonds – these are ‘loans’ to the government or companies that pay you interest in return. Government bonds are also referred to as gilts
  • Investment bonds – these are products from life assurance companies which invest your money in other funds and assets to provide you with returns over the medium to long-term
  • Open-ended investment companies (OEICs) – these also invest your money in other funds and assets to provide a return
  • Stocks and shares ISA – here your money may be invested in funds which invest across several assets including stocks and shares. This type of ISA also has tax benefits in that you don’t pay any personal income tax or capital gains tax on any profit you may make
  • National Savings & Investments – these are a range of savings and investments that are backed by the Treasury, which promises to guarantee your capital
  • Property – this may involve investing in residential properties or a holiday home to rent out
  • Shares – direct investment in individual companies. Here you take a stake in the company and if it does well you may get a dividend, which is a share in the profits. The value of your share may rise or fall depending on many things including how well the company has performed

Why not put our Advisers to the test and see what they could achieve for you by making your savings and investments work harder.  Contact us to book a no obligation meeting with one of our financial advisers.

Our Financial Advisers provide savings and investments advice as part of our holistic approach to financial planning for Lichfield and financial planning for Sutton Coldfield based individuals and businesses.