Investing in your future is one of the most important aims for investors across not only the country, but the world. But with that said, it can be tricky to find the best ways to do this for your finances.
With this in mind, we’ve put together five effective ways you could invest in your future and start building your wealth in the right way.
Read on to find out more.
Modern wealth management
One of the first ways to invest effectively in the future is to seek a modern wealth management service.
This can provide you with expert advice from financial professionals, who can help you adjust your investment approach to meet your specific requirements.
Your adviser can analyse your unique situation to determine the right recommendations. This can factor in things like your income, your financial dependants, your future goals, and any challenges you might be facing.
Whatever investments you choose to pursue, having a wealth manager by your side can significantly increase your chances of a successful outcome.
ISAs
Another great way to invest for the future is through an Individual Savings Account (ISA).
This account allows you to grow your savings whilst sheltering your money from tax. Any money you contribute to your ISA, up to the allowance, can be saved and withdrawn tax-free.
The current ISA allowance for the tax year 2023/2024 is £20,000.
By investing the full amount into your ISA each year, you can end up with a lump sum of money to withdraw tax-free and put towards your financial goals.
Also, any growth in your ISAs – interest, returns from investments, etc. – are free from Capital Gains Tax and income tax.
Pensions
You should also consider investing in a pension to build your wealth for your retirement. This allows you to grow your savings tax-free, and access this money to fund your retirement goals.
The amount you can contribute each year is determined by the pension allowance, which currently stands at £60,000. Any savings that exceed this amount could be impacted by tax.
Your adviser can help you structure your contributions each year to grow your wealth efficiently, whilst also aligning with your financial situation and ideal risk level.
Also, with the recent abolishment of the lifetime allowance, your adviser can offer guidance on how this might impact your pension, and how you can navigate this in the right way.
JISAs
ISAs are a good investment option for your future, but you can also consider Junior ISAs (JISAs) to build your children’s wealth.
These work similarly to ISAs, except the annual allowance for JISAs is £9,000. Also, JISAs cannot be accessed until the child reaches 18, in which their account becomes a standard ISA where they can withdraw the money tax-free.
This can help you grow your children’s savings from an early age, so they can achieve a range of goals for the future – whether this is paying educational fees, driving lessons and their first car, or purchasing a property, for example.
Leaving an inheritance
If you want to help secure your family’s future, leaving an inheritance can be a good option.
This allows you to leave your wealth behind to your loved ones when you pass away. Your estate can be made up of cash, investments, property, personal items, and much more.
It’s important to consider how Inheritance Tax (IHT) could impact your estate when you leave it behind. However, your adviser can help you structure your inheritance to shelter as much of it from IHT as possible.
For instance, you can consider leaving your estate to your spouse or civil partner, which is exempt from IHT. Or, you can make the most of your IHT threshold – £325,000 – or even consider leaving property to your children which extends this threshold to £500,000.
Are you considering any, or potentially all of these investments for your future? Make sure you consult your modern wealth manager to see which options are right for building your wealth effectively.
Please note, the value of your investments can go down as well as up.
