Archived article: This article was correct at the time of publishing. Tax, investments and pension rules can change over time so the information below may not be current.

5 investment goals for 2015

1. Get your existing investments working hard for you.
If you have existing investments, an excellent starting point is to dust off the paperwork and make sure they are performing as well as they could.

Lee Dooley Lee Dooley
30 December 2014

If they’re not, you should take action. Quite simply, you won’t have nearly as much money in the future if your savings are stagnating in underperforming investments. If you’d like help going through your investments, our knowledgeable and friendly investment professionals are here to help. Call us on 020 7189 2400.

2. Consider the benefits of consolidating existing ISAs or pensions*

Many of us have a number of old ISAs or pensions with different providers and this can make them difficult to monitor and manage.  Consolidating them into a single ISA or pension can help. As well as saving you time and effort because you’ll have a lot less paperwork, with your ISAs or pensions together in one place they’ll be a lot easier to monitor and manage. This means you’ll be in a much better position to make sure your investments are working as hard as they can. You may also save money by cutting down on fees. To find out more about consolidating ISAs or pensions, download our guide.

3. Make the most of your ISA and pension allowances

The Government offers generous incentives to encourage people to save for the future so it makes sense to take advantage of these where you can and prioritise tax-efficient accounts over others. The most common of these are ISAs and pensions.

  • With ISAs, you can invest up to £15,000 in a year and any gains you make on investments will be tax free. Higher-rate taxpayers don’t have to pay any further tax on dividends from investments either. Remember that you can’t carry over your annual ISA allowance so if you don’t use it by the end of the tax year on 5 April, you will lose it. Find out more about the Bestinvest stocks and shares ISA here
  • Investments in pension schemes grow free from Capital Gains Tax and Income Tax (except you cannot reclaim the tax credit on dividends). You also receive tax relief on pension contributions, which means money you invest gets an automatic boost from the taxman. Generally you benefit from tax relief up to your highest marginal rate so if you are taxed at 20% and invest £24,000, the Government will add another £6,000 to your contribution bringing the total invested up to £30,000. If you are taxed at 40%, you can claim an additional 20% via your tax return. No other investment gives you tax breaks like this. We have been voted Best Low-cost SIPP Provider of the Year by readers of the FT and Investors Chronicle in both 2013 and 2014. Find out more about our Best SIPP here

4. Set up regular savings

For those with new money to invest, setting up a regular savings plan is an excellent option. As well as making life easier and getting you into the savings habit because you won’t have to remember to invest, regular saving has a number of benefits, for example:

  • Regular investing helps smooth out the highs and lows of markets. If you were investing a lump sum, you’d be committing it all to the market at the same time. This might work well for you but buying into markets at the right time is notoriously difficult not to mention extremely stressful and if you get it wrong you could suffer.

With regular investing, your money is drip fed into the markets meaning you don’t end up buying everything on the same day at the same price. Instead, when prices are low your money buys more and when they rise, you get less. This is known as ‘pound cost averaging’.

  • If you invest regularly over the long term, your investment returns should receive a boost from compounding. Compounding refers to the snowballing effect that happens over time as your earnings generate more earnings. Even if you only invest a modest sum, under the influence of compounding, you are likely to see your savings grow quite substantially over the long term.

5. Is this the year to have your investments managed?

Choosing and managing your own investments takes time and dedication. While many of us start out enthusiastically, life often gets in the way, or we realise we’re not sufficiently interested to give our investments the attention they need. If this rings true, is 2015 the year to consider having your investments managed, or to invest with the support of a dedicated investment adviser? You can use our investment management solutions whether you have £500, £50,000 or more than £250,000 to invest, and our advisory service is available if you want to make your own decisions but would like help from an expert investment adviser to achieve your goals.

We can help you make the most of your investments in 2015. Call us on 020 7189 2400 to speak to a friendly and knowledgeable investment professional.

The value of investments can go down as well as up, and you can get back less than you originally invested. Prevailing tax rates and the availability of tax reliefs are dependent on your individual circumstances and are subject to change. This document does not constitute personal advice. If you are in any doubt as to the suitability of an investment, please contact one of our advisers. SIPPs are not suitable for everyone. If you don’t want to invest across different asset classes or don’t think you will make use of the investment choices that SIPPs give you then a SIPP might not be right for you. Self-directed investors should regularly review their SIPP portfolio, or seek professional advice, to ensure that the underlying investments remain in line with their pension objectives.

*Before you consider transferring a pension, it is important to ask yourself: Will I lose any valuable benefits or features from my existing pension plan? Will I incur any penalties on my existing pension if I transfer? Is it an occupational final salary pension scheme? (in which case it is very unlikely to be advisable to transfer) Have I considered the charges on my current plan? (a new arrangement may be more expensive – especially if you have a stakeholder pension). If you are near retirement or don’t need the additional flexibility of a SIPP it may not be worth considering a transfer at all.