Investment / Financial Advice

too_fast

Hello, I would like to ask the forums advice on my situation.

Some basic information about myself, I'm male, early 40's, engaged to be married (future wife has some small savings, and no debts), no kids (yet), no pension (except basic state through NI), self employed and a basic rate tax payer.

My financial break-down is as follows:

- House (no mortgage): Worth £330k
- Instant Access Cash Savings: £230k (earning between 0.5% and 4%)
- Instant Access Cash ISA: £68k (1.75%)
- Premium Bonds: £30k
- NSI Index linked tax free savings: £15k
- Selection of UK High yield shares: £61k
- Selection of US High yield Shares: £59k
- Various ISA Stocks & Shares funds: £100k

I'm interested to hear what people think I should be doing differently (if anything)? eg: pension, more shares, more property etc?

Thanks in advance!

PeacefulWaters

Are you a sole trader or a limited company?

What suggestions has your accountant made?

too_fast

A limited company.

The accountant hasn't made any suggestions with what to do with my assets.

westy22

If you have managed to achieve almost £900k in assets by your early 40's whilst remaining a basic rate taxpayer then I think you shouldn't do anything differently.

PeacefulWaters

too_fast wrote: »

A limited company.

The accountant hasn't made any suggestions with what to do with my assets.

I don't think much of your accountant! While he/she can't give investment advice identifying options to minimise you tax liability is fairly straight forwards.

There would be tax advantages to setting yourself up with a pension funded by the company. Perhaps by adding your future wife to the payroll too could increase the combined value of this plan.

Gradually moving investments into ISA wrappers to shield from CGT. Utilising your partner's ISA allowance. Moving any easy access funds to accounts paying more than 0.5%.

As for suitability of the balance of investments, if you're not sure an IFA is the way forwards.

too_fast

PeacefulWaters wrote: »

I don't think much of your accountant! While he/she can't give investment advice identifying options to minimise you tax liability is fairly straight forwards.

The accountant does advise on minimizing my tax coming out of the company, just not on what to do with the money when I have it!

There would be tax advantages to setting yourself up with a pension funded by the company. Perhaps by adding your future wife to the payroll too could increase the combined value of this plan.

I have been wondering if I should get a pension. I just don't like the idea of government policy at the time dictating what I can do with it.

Gradually moving investments into ISA wrappers to shield from CGT. Utilising your partner's ISA allowance. Moving any easy access funds to accounts paying more than 0.5%.

I already pay the maximum into ISA's every year. My future wife's probably not too much use for tax planning, as she is a US citizen, which seems to bring a whole set of tax issues with it. Most of the accounts are getting the best Instant Access rate I can find (the 0.5% funds are in the US, and the 4% funds in Australia. I'm getting 1.6% on my UK funds).

As for suitability of the balance of investments, if you're not sure an IFA is the way forwards.

Yes, that is probably my main question. Too much cash? Should I invest in more stock market type investments? and if so, what products? I guess an IFA maybe the next step.

Scottish_Borders

The main question is, what are you hoping to achieve with the portfolio moving forward? Others I would ask are; How much do you feel you need in instant access, how much in a realistic emergency/reserve pot and what, if any of your existing funds are earmarked for longer term (Retirement/Further Ed for potential children.

You are only in your 40's at the moment so longer term plans could be a good option for the money you have in cash if not required in the short term. The recent changes within the Budget have increased the focus on pensions and although there are still some restrictions, there are a good option for some, especially for those who at this time only have the state to rely on.

Other ways of achieving good growth is to look at a fund, or funds that match your attitude to investment risk and invest in assets you feel will do well in the future - although this is somewhat of an unknown quantity as we can never really predict the future. The next thing to do is find the most appropriate wrapper. With my capital I have one account that is split between an OEIC (open-ended investment company) and an ISA, each year whatever the maximum amount allowed to be invested in the ISA, I just move this across from the OEIC to the ISA wrapper within the same account. This increases the growth and tax savings over the years, but also gives me access to tax free income in retirement from this part of your portfolio.

I usually try and get my clients state/personal/company pensions up to the limit to where they would be just about to pay tax gaining as much as possible in tax relief from the pension opportunity, then direct the rest to OEIC's and ISA's.

As stated at the start, there are many ways to skin a cat and what you are trying to achieve, your attitude to investment risk would dictate what you ended up doing with your portfolio.

Cheers

Gary Stevenson