Savings and investments advice

Some of the many reasons to put some money aside:

  • Weddings
  • Learning to drive
  • Buying your first house
  • Paying for university
  • Special birthdays and anniversaries
  • Your retirement
  • A new car
  • Elderly care
  • Children's savings

We can advise you on any savings or investments:

National Savings Products
Some of the least risky of investment options are those offered by National Savings, which raises money on behalf of the UK Government.

While investment returns are not necessarily spectacular and some involve tying your money up for long periods of time, they are nevertheless stable and in some cases tax-free.

They include National Savings Bank accounts and Savings Certificates and various forms of Savings and Income Bonds.

Individual Savings Accounts (ISAs)
ISAs represent a tax-efficient container into which to place cash savings and investments in equities, bonds and collectives (see below).

The cash portion, currently up to £3600 per year, is usually a deposit with a bank or building society and because it is an ISA, interest and growth is not taxable.

Equities
Both cash ISAs and National Savings products are certainly much less risky than buying equities, that is to say investing in the shares of companies listed on a stock exchange. However, equities do offer an upside possibility that National Savings products do not.

You have the possibility of gaining not only a dividend - a proportion of the company's after tax profits distributed to shareholders - but also a capital appreciation. If the price of the shares goes up after you buy them then you have made, on paper at least, a capital gain.

The bad news though is that the value of shares can go down as well as up, which means you risk losing your investment if the price of the shares falls.

Collectives
That is why many people prefer collective investments such as unit trusts and investment trusts. In both cases an individual is able to invest in a basket of shares of different companies, that way spreading his or her equity investment risk.

In the case of unit trusts the investor buys a unit - part of a large fund which is itself invested in a variety of companies. An investment trust is a company listed on the stock exchange and whose business is investing in other companies. In both cases the investor is trusting his or her money to the judgement and skill of the fund manager.


Collectives can also invest in fixed interest instruments.

These include UK government stock, also known as gilt edged stock or "gilts" for short. Corporate bonds are also fixed interest instruments and both represent direct borrowing on the part of the issuer of the bonds. They are referred to as "fixed interest" because their cost of borrowing is fixed, while the price of the bonds themselves may float up or down depending on supply and demand.

Traditionally, fixed interest investments have been regarded as a safe option. But it is important to remember that not only do they fluctuate in price, but also that the investor risks that the issuer may not be able to pay the interest (coupon) on the bonds, or the principal when the bonds mature.

With-profits
A with-profits policy is a type of investment fund.

Policies that are with profits give the insured the extra benefit of a bonus that is a share of the profits from the funds that the premiums have been invested in.

How and where the premiums are to be invested is worth establishing if you are going to invest in a with-profits product, such as single premium insurance bonds for example. But as with all long-term investments in the stock market or in interest bearing instruments, it is important to stay with them for the long term. That way they have time to build up and "smooth" the short-term ups and downs in rates of return.

Some policies may also benefit from terminal bonuses if they are held for their full term. When choosing this type of investment it is important to be aware of what charges, fees or commissions may be attached to them and when profits and bonuses are added to the policies. Some, for example will be heavily weighted with charges at the beginning of their policy life. There is also a risk that the investor may not get back the full amount they have invested.

Armed with these explanations of what types of financial instruments there are to choose from, you can now seek advice as to which ones we recommend as best suiting your risk and reward profile.

Midas specialist investment types

  • Savings Endowments
  • Investment Bonds
  • Unit Trust and ISA's
  • Savings Accounts
  • Shares
  • Bonds

For investment products and advice, please call today on 0845 527 6261
Telephone: 0845 527 6261
Email: info@midasfp.co.uk
Address: Midas Financial Planning Services Ltd
10 Oxford Street
Kidderminster
Worcestershire
DY10 1BB

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