Cornwall LivingIssue #83
Are you ready to invest?
Low interest rates on cash savings since the financial crisis have meant that many savers have turned to the markets in the hope of achieving a better return.
Although investing means taking risks with your money, this isn’t necessarily a bad thing – more risk could mean better returns. But if you’re going to invest, you should be prepared for the fact that you could lose some, or even all, of your savings.
If you’re looking to grow your money over many years – perhaps to fund a dream purchase or help you in retirement – cash might not be the right option.
If you are able to accept some level of risk, investing in the markets through a Stocks and Shares ISA might offer you exposure to higher returns than cash alone can deliver. Here are just some reasons to open a Stocks and Shares ISA.
Inflation can be the enemy of cash savings
One of the appeals of cash savings is that you can access them when you want. Your interest is also generally fixed, so their value won’t swing up and down like share prices can. It’s sensible to keep enough cash to cover any short-term needs, but keeping too much of your savings in cash can carry a cost.
However, when the price of goods and services, or inflation, is rising faster than the rate of interest you receive on, say, your cash savings in a UK bank or building society, the ‘real’ value of the amount is eroded which could leave you worse off.
By accepting some level of risk and investing your money in assets like company shares, bonds and property, you could potentially achieve higher returns than cash alone can offer.
Protect your investments from tax
The beauty of investing through an ISA is that any income you receive, and any capital gains from a rise in value of your investments, will be free from personal taxation, irrespective of any other earnings you have.
It’s important to remember that ISA tax rules may change in the future. The tax advantages of investing through an ISA will also depend on your personal circumstances.
It might be easier than you think
You can choose to invest a lump sum or set up a regular savings plan that fits your circumstances and goals. There are a number of different approaches to investing, each with their own risk and return profiles.
It’s important to consider obtaining professional financial advice to help you establish an investment approach that is right for you. If you’d like to know more and discuss opening a Stocks and Shares ISA, contact financial advisors Matt Begley or Steve Rusga.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. Although endeavours have been made to provide accurate and timely information, we cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
The value of investments and the income they produce can fall as well as rise, you may get back less than you invested.