Investment & Pensions

There are many reasons individuals look to save and invest for the future. Whether it is saving to pay for the unexpected bill, looking to save for a deposit on your first home or saving into a Pension. At different times of our lives we all have different goals and aspirations which evolve through our lives from progressing up the property ladder, paying schools fees to weddings. With good financial planning and investment management, your investment strategy through your life should evolve with you and help your money work for you to reach these aspirations in life.

There are many ways to save and invest for example from cash accounts (bank accounts), fixed term notice accounts to cash ISA’s. As investment sums grow over time depending on your individual objectives and attitude to risk. There may be a requirement to seek higher returns on your investments especially as interest rates are currently so low.

Inflation can erode the value of money over time, to try and keep pace with inflation. Saving over the longer term usually requires a balance between holding a certain amount of money within cash accounts for easy access and some form of investing to keep pace with inflation and produce higher returns on your investments over the longer term.

Performance of Cash V’s Investments over a 20 year period

Research has shown if you invested £100 a month into a typical savings account you would have saved around £12,305.79 after a 10 year period and £26,670.92 after a 20 year period.
This is a nice little nest egg, but the same research showed if it had been invested in equities
The same £100 a month the investment would be worth around £19,594.66 after a 10 year period or £56,344.56 after a 20 year period.

Although this looks impressive, investing in the stock market is not for every client and great care must be taken when looking to invest. This shows over the longer term how investments can outperform cash investments, but there is always an element of risk with investing money that you may not get back what you initially invested.

Our Strategy

Our aim is to provide you with the peace of mind that your investments will be managed by some of most experienced, highly qualified and rated professional’s in the country. We believe if you wish to entrust your hard earned cash for someone to invest, you should be aware of your options and the charges. The fee should be fair and the person looking after your account should be appropriately qualified to do so.

As larger firms by economies of scale are often able to charge a lower fee, individuals are often unaware that they are able to access these companies expertise. These firms have had to evolve over the years with the competition to provide a very flexible, friendly and highly professional service to their clients, at often a significantly lower fee.

As investments strategies and the performance can have such a significant impact on your overall living standards, especially if you are saving for a pension. We constantly review the companies we are referring to for the level of service they provide, their overall knowledge of the stock markets, the research they use, their performance against their peer groups, and their fee structure.

We will only refer to companies who consistently perform well against the benchmark and operate within a fair fee structure shown in the Fee and Performance.

Research has consistently shown that poor performance and high fees can cost individual’s as much as £482,791 over a 20 year period.

Pensions

(Pension Contributions, Pension Transfer, Pension Drawdown, Defined Benefit, Defined Contribution)

Pensions in recent years have become an investment “Gem”. Gone are the days of paying into a pension for years, only to be rewarded with a small annuity payment at the end of the term.
Pensions have now become an extremely useful investment tool, especially since the Pension Freedoms Act in April 2015. Pensions can now be viewed as an investment in their own right providing a number of very useful benefits. For example :

Generous personal contributions rules ; If you are a Basic-Rate tax payer you will receive 20% tax relief, which will mean for a £10,000 investment you will only have to pay £8,000 physically yourself, the tax man add the same day £2,000 to your investment. Higher rate tax payers received the same 20% basic, and can reclaim a further 20% through their tax return, effectively meaning that if you are a high rate tax payer your £10,000 contribution will cost you £6,000. And a top rate tax payer’s contribution with the same rules would have cost £5,500. These tax rules over the years make pension investments very attractive together with a number of other rule changes which can be found on the Government Pension Advice website.

Inheritance Tax Free; Another significant rule change to pensions means individuals are now eligible to pass their pension on inheritance tax free between husband and wife, and on to dependents.

Pension Drawdown; Once you are 55 years of age anyone with a defined contribution pension is entitled to have full access to their pension “Drawdown”. Individuals are able to withdraw 25% of the pension pot tax free, the remainder of the pot is taxed at your marginal rate. What you do with your pension is up to you thereafter. Often the Pension fund itself runs into hundreds of thousands of pounds and if you take all of this out of the pension itself, there may be quite a liability for tax. This is where an Independent Financial Advisor normally becomes involved or an Investment Firm who specialises in managing investments. They will mitigate as much tax as possible, and provide the investment support that you require.

If you are looking to keep your pension invested to provide you an income in your later years these companies will tailor your requirements within the overall investment strategy to ensure your requirements are met.

Pensions should be viewed as a long term investment as although the tax relief is generous, individuals are unable to gain access to their pension until they are 55 years of age, and there specific rules as to how much you are able to invest each year which a financial advisor can discuss with you.

Our Strategy

It has always been our belief that the investment of an individual’s pension should be done with the greatest of care, as this money is ultimately going to provide the individual concerned with the level of lifestyle they wish to lead in their later years.

Our overall objective is to provide the client with the confidence that the company which is advising and looking after their pension will provide the most comprehensive, tailored, friendly service. With an investment performance which is ranked top end of its peer group consistently, within a fee structure that will not impede on the growth of your pension or the income you receive.

As a pension can now also be transferred inheritance tax free between dependents, to some individuals it maybe even more imperative that as much of the pension pot is maintain and the capital preserved. In this situation how your pension is managed can be quite important. The investment strategy employed should provide you with the level of income you require from dividend and income payments or very close to. This would mean your money is working hard for you providing you a high level of dividend and income from your investments, preventing as much of your investment as possible from being eaten into. This is when the expertise of a good Investment Manager and/or Independent Financial Adviser (IFA) will really add value.

Fees on a Pension

Fees can also significantly affect your level of living if they are high and effect the growth of your pension depending on the way the pension is invested. Over a 20 year period the compounded effect of high fees could result in the equivalent of £482,791 being unknowingly given away. For more information on the fees and the effects of fees on performance click.

All fees should be provided by your Independent Financial Adviser (IFA) and Investment firm in a transparent way. You can request a full list of your charges from your existing Independent Financial Adviser and Investment firm. Fund Manager Fees are provided in the Key Investment Information Documents (KIIDs) which should be provided to you by your adviser when you invest within a Unit Trust or Open Ended Investment Company (OEIC). These details are also provided by the platform documents themselves. These documents will provide you the full detail of where geographically the fund is invested and which sectors, together with details of the fund managers, their performance against their peer groups and their fees for investing your money and managing your money within their specific fund.