Savings and investments

There are so many different types of savings and financial investments that it is wise to seek advice as to which ones to choose.

• National Savings products
  National Savings and Investments are backed by HM Treasury and you can rest assured that any money you invest is 100% secure. Some schemes pay interest that is taxable while others have the benefit of being tax-free. Premium Bonds don't pay interest but you can win tax-free prizes.
  There are some 'easy access' schemes available which let you take your money out whenever you want. But most NS&I schemes are long-term investments where your money is invested for between one and five years. These include, savings certificates, Bonus Bonds & Premium Bonds.

• ISA and PEP rules have now changed with effect from 6th April 2008. From this date, the following rules will now apply:
  - The annual ISA investment allowance has been raised to £7,200. Up to £3,600 of that allowance can be saved in cash with one provider. The remainder of the £7,200 can be invested in stocks and
     shares with either the same or a different provider.
  - ISA savers are able to invest in two separate ISAs each tax year; a cash ISA and a stocks and shares ISA. Mini and maxi ISAs no longer exist.
  - Mini cash ISAs, TESSA-only ISAs (TOISAs) and the cash component of a maxi ISA have now automatically become cash ISAs.
  - Mini stocks and shares ISAs and the stocks and shares component of a maxi ISA have now automatically become stocks and shares ISAs.
  - All Personal Equity Plans (PEPs) have automatically become stocks and shares ISAs.
  - ISA savers are now able to transfer money saved in their cash ISA to their stocks and shares ISA.
  
  Investors will have no personal liability to income tax on income arising from investments held within an ISA. Neither will investors have any personal liability to capital gains tax on gains made on investments held in an ISA. Capital losses occurring within an ISA cannot be used to offset capital gains realised elsewhere. No details of ISA investments, income received or gains realised need be included on your annual tax return.

• Direct Equities / Shares
  ISAs and National Savings products are clearly much less risky than investing in the shares of companies listed on a stock exchange. However equities do offer an upside possibility that National Savings products do not.
  You have the possibility of gaining not only a dividend - a proportion of the company's after tax profits distributed to shareholders - but also a capital appreciation. If the price of the shares goes up after you buy them then you have made, on paper at least, a capital gain.
  The bad news though is that the value of shares can go down as well as up, which means you risk losing your investment if the price of the shares falls.

• Collectives
  Unit Trusts, Open Ended Investment Companies (OEICs) and Investment Trusts can provide a wide range of holdings in different stocks and shares. They enable private investors to obtain a professionally managed investment in a wide spread of companies thus offering more security than would be available from buying stocks and shares direct with such a relatively small amount.

If you require more information, contact us on 01276 488030 or fill in our Request Form.