ISAs and Investments
You can help maximise the potential of your savings and investments with a wide range of flexible solutions that are available for Contractors. The extensive experience of the IFAs at ContractorFinancials means that they can search thousands of investment funds to find the right solutions for you.
One of the most popular investment routes amongst Contractors is an Individual Savings Account (ISA) because of its significant tax breaks and flexibility. There are
a number of key benefits for an ISA investment:
- You can invest up to £10,680pa each year into an ISA
- There are a wide range of ISAs to choose from so you
can find the best solution to your needs
- ISAs offer flexible investments with options that are
suitable for short, medium and long term needs. With most you can draw out
your savings at any time.
Make the most of your savings
With HMRC’s continuing efforts to remove the tax breaks available to Contractors, now more than ever it is important for you to take advantage of the few remaining options available.
Investing in an equity ISA is one of the most popular routes and stock market based investments historically offer the best returns as long as you can accept that your funds may fluctuate in value from one year to the next. It is often best to consider a minimum time horizon of five years or more so that your savings have a chance to grow and hopefully ride out any dips in the stock market. ContractorFinancials search thousands of options to short list the funds that have a history of positive performance and strong prospects.
You have the option to invest in a lump sum, however the advisers will recommend that you use monthly contributions to spread the risk of market fluctuations and
avoid the end of tax year rush.
For investors with a low risk tolerance or those that need to have access to their savings in the short term, a cash ISA would probably be more suitable as they invariably offer instant access. With cash ISA you should benefit from a higher interest rate than you would gain in an ordinary High Street savings account because banks view ISA investments as a longer-term commitment and reward this with extra interest.
Offering a compromise between the cash and equity ISAs, a protected ISA tracks the stock market but it carries protection for the underlying value of the fund. This allows Contractors to benefit from some of the potential for growth in an equity ISA with the security of a cash ISA.
Pension or ISA?
Ideally both if affordable, as the pension offers substantial up-front tax breaks whilst ISAs offer accessibility. This ability with an ISA to access your savings at any time carries dangers though as you are more likely to take money out leaving no long term nest egg. In most cases the pension cannot be accessed until you are 55 which ensures you will have money for your retirement.
ContractorFinancials will be happy to advise you on your investment options, to find out more please Call 0845 062 8888 or email CPS@contractorfinancials.com
Financial advice is given by ContractorFinancials, which is a trading name of Contractor Financials Ltd and is regulated and authorised by the Financial Services Authority.
The value of investments may rise as well as fall and past performance is not a guide to future returns.