Your Financial Future- How to make your money work harder

When thinking about your future and planning your finances – it is useful to think about what your goals are and how you can make your money work hard so you can realise them.

When you are making financial plans, break your goals down into Short term, Medium term and Long term.

Scott Rogers from Rogers Wealth Management has shared his expertise with DLUXE on how you can plan ahead efficiently and effectively.

Short term (The next 5-10 years)

Look at what you want to achieve financially in the short term – this might be a deposit for a house, saving for a life event such as a wedding or planning to have a family. If these events are under 5 years away then cash based savings are often the only option.

Stock and Shares ISAs can be a great vehicle for investing for 5-10 years as any money you put into them is free of any further liability to Income Tax or Capital Gains Tax – so no tax on your interest, no tax on withdrawals and no tax on the profits. The ISA allowance remained untouched in the budget therefore you can still invest £20,000 per person into an ISA this tax year (ending 5 April).  The current volatility in markets can be off-putting but investing in stocks and shares is likely to remain the best option for ISA savers as long as you can invest for 5 years. Also look at LISA’s which can be used to help save for the longer term or for a deposit for a first house.

Medium term (10 – 20 years)

Your medium term goals might be about financial security – whether that is paying off your mortgage, or saving for your children. Junior ISAs are a great way to give a child a financial head start – you can also contribute up to £9,000 into a Junior ISA per child or grandchild. The majority of Junior ISAs are held in cash, which is something parents should perhaps reconsider, given the current interest rate outlook.

Long term (20 years plus)

Long term you should be thinking about retirement and how much you will need to fund your retirement. As a rule your retirement income should be about two thirds of your final salary for a comfortable retirement. The earlier you start paying into your pension, then the more ‘compound interest’ you will have, allowing your savings to build up over time. Look at where your money is invested too – if you are younger you can afford to choose a plan with higher risks, as you have a longer period of time to ride out short term fluctuations.  Pensions are also a great way to be more tax efficient. Consider utilising your annual allowance up to £40,000 each year and unused allowances from the three previous tax years can also be carried forward. For higher earners this can be a great way of regaining the personal allowance which starts to be withdrawn for incomes above £100,000. Remember as well, it is never too early to start a pension – some people even start them for their children to give them a financial head start.

In conclusion…

When looking at tax and making your money efficient, the most important thing is to think about your finances and money as a whole – include savings, pensions and assets – that way you can ensure you have best plan in place to ensure your money works best for you. Break it down into manageable goals and that way you will have a plan in place to see you through into retirement.

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The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

Equities do not provide the security of capital which is characteristic of a deposit with a bank or building society.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.

Please note, LISAs are not available through St. James’s Place.

Rogers Wealth Management Ltd 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

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