A comprehensive investment guide for modern investors

For the modern investor, it can sometimes seem tricky to structure the right investment approach to achieve your financial goals.

However, we’re here to offer a quick guide on some of the key investments you should consider for building your wealth effectively for the present day and for the future you.

If you require further advice on this matter, we advise you to speak to your modern wealth manager about your unique requirements.

Read on to find out more.

Personal pensions

Personal pensions are another important type of investment that every modern investor should at least consider.

This allows you to start retirement planning to grow your savings tax efficiently.

Contrary to some beliefs, it’s never too early a time to start planning your pension contributions, as more preparation can mean a higher chance of a successful outcome for when you retire.

The current annual pension allowance is £60,000, meaning any contributions to your pension past this limit each year can be subject to tax charges.

With the right structure for your contributions, you can effectively build your savings towards your goals, which could include things such as – retiring early, supporting financial dependants in retirement, having a certain amount in your pension pot when you retire, and more.

As always, you can consult a financial expert to help you align your investments with your unique financial situation at current, as well as navigate things like pension investment fraud and any other potential challenges.

Individual savings accounts

One of the first accounts you should consider as a modern investor is an Individual Savings Account (ISA).

This allows you to grow your savings each year whilst sheltering your money from tax. The amount you can contribute each year is dependent on the annual ISA allowance – for the 2023/2024 tax year, this is £20,000.

There are different types of ISA accounts, which include a stocks and shares ISA, a cash ISA, a lifetime ISA, and an innovative finance ISA.

To further increase your opportunities for tax-efficient growth, you can diversify your ISA investments across different accounts. However, you can only open one of each ISA type per year, and your total allowance must be dispersed between them.

For instance, you can invest £10,000 in a cash ISA to save this money away and shelter it from tax. In the same year, you can invest £10,000 in a stocks and shares ISA to potentially benefit from successful investments in various securities. Also, any growth made from your returns is sheltered from income and Capital Gains Tax (CGT).

Junior Individual Savings Accounts 

As a modern investor, you might not want to just build your own finances, but also that of your children too. This is why Junior Individual Savings Accounts (JISAs) are a good option to consider for your children’s financial futures.

These investments allow you to save money each year into accounts for your children which is sheltered from tax – similar to how standard ISAs work.

The difference with these types of accounts is that the annual allowance is currently £9,000 for JISAs. As well as this, the money invested is for when your child turns 18 and can therefore not be accessed until this time. However, anyone can contribute up to the allowance each year, not just you – perfect for any money grandparents or godparents want to contribute to a child’s future.

A JISA can be great for growing your children’s wealth tax efficiently, so they have a lump sum to go towards their goals when they’re older – such as purchasing a property, paying for education fees or even something to put towards their wedding.

With each of these investment options, make sure you align your strategies with your specific financial situation, to help maintain the right approach. Once again, speaking to your modern wealth manager can help you achieve this effectively.

Please note, the value of your investments can go down as well as up.

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