A recent survey1 has shown that for many, building up their savings is not top of their agenda.
Everyone should think about putting some money aside for emergencies, and for the bigger things in life like the deposit on a home, a child’s education or a wedding. So, for most of us having some cash that we can access quickly to pay for unexpected things like an unforeseen bill, and some that steadily builds up over the years, makes good financial sense. An ISA is a simple, tax-free way to save or invest for the future. The advantage of these types of account is that you don’t pay tax on the interest or dividends you earn, or the increase in the value of your investments. There are now several different types of ISA available, designed by the government to encourage everyone to save or invest for their future. The basic types are:
· Cash ISAs and stocks and shares ISAs for savers and investors
· Junior ISAs for children
· Help to Buy ISAs for those saving for their first home
· Lifetime ISAs for those saving to buy their first home or who wish to save until age 60.
TAKE YOUR FIRST STEPS IN INVESTMENT
Investment means introducing your money to risk, but also offers the prospect of getting better returns than are available on savings accounts.
Fledgling investors often begin by drip-feeding smaller amounts of money into ISAs, collective investments such as unit trusts, managed funds or bonds, rather than risking a lump sum at what could turn out to be a bad time.
If you put your money into stock market investments you should be prepared to do so for at least five years and preferably longer. You’ll also need to think about your attitude to risk, as this will have a bearing on the type of investments that will be right for you. If you invest in the stock market, your capital will rise and fall according to how the economy and markets here and globally are performing, meaning that you need to be able to cope with peaks and troughs.
Whether you’re saving or investing to help your children, want to retire early, or simply build your lifetime wealth, good advice can ensure that you make the most of your money and avoid the pitfalls.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
This article is purely for information purposes and does not constitute advice based on your individual needs and circumstances.