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18
Mar 2021
Saved some cash during lockdown? Here’s how to make it work harder
This article is sponsored by James Henderson Wealth Management.
It’s estimated that considerable savings have been built up by some Brits during lockdown, and for many, especially younger people, this could be a once in a lifetime moment to think ahead.
If you’re one of the lucky ones who’ve been able to save money over the past year, do you have a plan for it?
You might be thinking about buying a new car, splashing out on a holiday, or simply saving it for a rainy day. If you’re thinking about saving, read on. If you’re not, read on anyway, because it might change your mind!
Jim Henderson, of Harrogate-based James Henderson Wealth Management, has some top tips for helping you get as much wealth out of your money as you can, aiming for you to live the lifestyle you want in years to come. Jim can help you prepare financially for your future, regardless of your income.
Jim says:
Jim’s tips:
Start saving sooner rather than later
Albert Einstein reportedly called compound interest the ‘eighth wonder of the world’. Put simply, the earlier you invest, the longer your money has the potential to gain interest and grow, and as Jim puts it, "what's important for investments is time".
Please note that these figures are for example purposes only and they are not guaranteed - they are not minimum and maximum amounts. What you get back depends on how your investment grows and the tax treatment of the investment. You could get back more or less than this.
Put your savings in an Individual Savings Account (ISA)
Gone are the days when the best way to save money was to put it in a piggy bank or hide it under the mattress – or even just leave it in your current account.
If you don’t put your savings somewhere tax efficient, you could end up paying tax on any interest you gain… one of the most popular ways around this is to put it in an ISA.
Everyone gets an annual ISA allowance, meaning you can save up to £20,000 each year and any growth received is not subject to income tax or capital gains tax.
Jim explains:
Pay into your pension
New freedoms to take benefits and generally leave pension savings as tax-free inheritance have made paying into a pension even more attractive than it was a few years ago – but the tax man actually adds to your savings as well.
For most people, for every 80p you put into a pension, then government will automatically add 20p in tax relief, so a £1 contribution can effectively cost you just 80p. Higher earners can claim extra tax relief through their annual tax return, paying 60p for a £1 contribution.
Speak to a professional
It’s normal to feel confused about finances, but that’s where the experts like Jim come in: he can explain everything you need to know in a way that makes sense to you.
To get in touch with Jim for advice on ISAs, pensions, or investments, visit his website.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested. An investment in equities does not provide the security of capital associated with a deposit account with a bank or building society.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.
James Henderson Wealth Management is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products.
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