Your Investments, Your Financial Future
Many people feel that investments can be a confusing and complicated topic. Sadly, because of this, they take the view that ‘out of sight, out of mind’ means that everything will be ok, eventually. This is definitely not the case.
Any investment you make or have already made needs to meet certain basic criteria which are personal to you and your circumstances. Can you answer ‘yes’ to the following questions?
- Do my investments reflect my own attitude to investment risk?
- Is there a strategy in place for reviewing the investment risk within my investments, to take account of market and personal changes?
- Are my investments tax efficient?
- Are my investments producing the required income or capital growth to meet my needs and aspirations?
- Are my investments accessible in times of need?
- Are my investments in a balanced portfolio of funds or just invested in a single fund?
With Profit Investments
With Profit funds, which were once a popular and seemingly secure way of investing into Pensions, Endowments and Bonds have been in decline for some time as insurers continue to cut maturity payouts.
Whilst these funds continue to raise concerns with our Regulator, the Financial Services Authority, and investors alike, the first rule is not to act in haste. One needs to check if there are any guarantees, maturity bonuses and periods when funds can be accessed or transferred without penalty. For many this is at the 10 year anniversary.
It is claimed that there are an estimated 40 With Profit Bond Providers alone, covering nearly 300 different with profit funds. Over the next few years the best estimate is that £39 billion of invested money will mature. Ahead of these dates an Independent review is a must.
Investing for Income or Capital Growth
You may have accumulated investment funds by using vehicles like ISA’s, Investment Bonds, Unit Trusts, Regular Premium Savings or even your Bank or Building Society account. However, unless you have been regularly reviewing the underlying investment strategy of your provider you may well have been receiving income or capital growth returns well below what you could have expected.
Charges, attitude to investment risk and investment selection will all impact on your investment performance. These can be adjusted quickly and simply, but you also need to ensure that you obtain the maximum possible Net Return and fully use your allowances for income and capital gains. Pensions, ISA’s, Bonds, Offshore Bonds, Unit Trusts and OEIC’s all have facilities to assist in improving the tax efficiency of your investments. Are you maximising your returns? |
