During the pandemic, those lucky enough to continue to receive a regular income have found themselves with surplus cash due to the lack of spending opportunities, especially on family holidays.
Whilst many have taken advantage of the economy reopening and have enjoyed spending sprees on themselves and loved ones, there are those of us who are enjoying the idea of having a little set aside for a rainy day or their future retirement.
With the Bank of England’s base rate hitting an all time low, the savings interest rates have been greatly affected. With many achieving 0.01% and the inflation rate currently at 1.51%, the spending power of your savings is reducing.
Despite the volatility in the marketplace, there are still many opportunities to potentially achieve returns greater than the inflation rate:
• Pensions – If you don’t require access to your funds until you are at pension age, you can receive tax relief on any eligible personal contributions into your pension, giving you an instant lift in your savings. If you are a higher rate taxpayer, the amount of tax relief you receive it also higher. All contributions are subject to your personal allowances and contributions already made.
• ISAs – These are tax efficient savings, where you will not need to pay tax on gains made in these plans. You can contribute up to the annual allowance (currently £20,000) and withdraw any amount you wish, when you need it, making this a very flexible savings vehicle.
• Structured Products – If you don’t require access to your funds for a specific period of time, there are a multitude of Structured Products, which can be as risky or as cautious as you want them to be. They can also be used to invest in Pensions or ISAs, and normally have a set figure for return. Some also have a guarantee that you will not receive less than you invest, even if the markets suddenly drop.
All our recommendations are based on the level of risk that you are willing to take with your holdings and are specific to your requirements.
If you have savings that are not performing and would like to know your options, speak with your adviser or contact the office on 01277 202222 or email email@example.com