There are lots of choices of where to save or invest your money to make your end of life better or leave a healthy legacy.
You should usually look to use your tax free allowances first. Our advisers can help with information on the pros and cons of ISAs, OEICs, bonds, stock and shares. Contact us.
The distinction between investments and savings isn’t clear cut. Generally speaking, ‘savings’ refer to the use of regular contributions, payments or the use of surplus income to help achieve a future capital need. You can do this in a number of ways, the most obvious being bank accounts.
The purchase of a financial product or other item of value – such as shares, bonds, property and commodities – with an expectation of earning an income or making favourable future capital returns. The value of investments can fall as well as rise, and you could get less than you invested.
An ISA (Individual Savings Account) is designed to enable an individual to save without paying income tax on their savings/investments. This can be either a cash ISA or a stocks and shares ISA. On death an ISA still forms part of your estate and would be included when calculating any inheritance tax due.
An investment fund shared by a large number of different investors who pool their money. The fund is divided into segments called ‘units’. Investors take a stake in the fund by buying these units, the price of which will vary as the value of the investments the trust has invested in increase or decrease.
An Open-Ended Investment Company (OEIC) is a type of collective investment scheme; hybrid investment funds that have some of the features of an investment trust and some of a unit trust. Like investment trusts, OEICs issue shares and use the money raised from shareholders to invest in other companies. They differ from investment trusts in that they are open-ended, which means that when demand for the shares rises the manager just issues more shares.
Checking the rate of interest on savings accounts can make a big difference to your annual income. Banks are unlikely to draw it to your attention if you have an account that’s attracting very low interest. Check out the National Savings website to find all current products and compare interest rates. Some of these are tax efficient for higher rate tax payers, while others are good for basic or non-tax payers. Comparison sites show some, although probably not all, the best rates on the market at any one time. The least you should do is ask your current provider if you are on the best possible interest rate with them.
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