Investments + Savings

Everyone wants their savings and investments to be in the best place and to earn the most interest or achieve the highest income. Each of us will need different advice and where funds are invested will also differ according to your needs, objectives and importantly, attitude to risk. Call us on 01752 896943 and we can help.


Individual Savings Accounts (NISA)

Investment Bonds   

OEICs (Open Ended Investment Company)     

Endowment Policies     

Savings Accounts     

National Savings and Investments (NS&I)

EIS (Enterprise Investment Scheme) and VCTs Venture Capital Trust

Ethical Investment Options.


Types of savings and investments we can help you with:


Individual Savings Accounts (NISA)

ISAs replaced the Personal Equity Plan (PEP) in 1997 when Labour came in to power and the amount that can be invested is controlled by the Government. In the current tax year the maximum you can invest is £20,000 but the current government has pledged to increase this amount in line with the Retail Price Inflation each year. 

ISAs are a tax efficient investment and you will receive tax free growth and income, although a small tax is charged on dividend income at 10% within the fund which cannot be reclaimed.

For an investor, ISA allowances should be used before considering other products providing a Trust for tax planning is not required. A Cash NISA and a Stocks and Shares NISA can be held in the same tax year, but only one Stocks and Shares NISA can be held in any tax year.


A Cash NISA is a tax-free savings vehicle and the maximum you can pay into one is currently £20,000 . You do not have to invest the full allowance in one lump sum and you can pay regular amounts into it.

To invest into a Cash NISA you must be:-

• Aged 16 or over • Be resident in the UK for tax purposes. • A Crown employee, such as a diplomat or a member of the armed forces, who is working overseas and paid by the Government • Spouse or civil partner or one of these people

Stocks & Shares NISA

This type of NISA would suit an investor who is happy to tie up their money for at least five years. The current allowance into one is either the full NISA allowance of £20,000. As with the Cash ISA, you do not have to invest your full allowance in one go, but pay a regular amount.

Any unused NISA allowance cannot be rolled over to the next tax year, therefore, you must ensure you make use of your full NISA allowance before opting for other savings or investment products which may increase your tax liability. Stocks & Shares NISAs are also free of Capital Gains Tax and ISAs can now be used for Inheritance tax purposes.

Many people have built up large sums of money in Cash NISAs which are now receiving low interest but it is possible to transfer some or all of your Cash NISA funds into a Stocks & Shares NISA  and improve your returns over the longer term. Once you have done this, however, you cannot transfer back.

To invest in a Stocks & Shares NISA you must be:-

• Over 18 or over • Be resident in the UK for tax purposes • A Crown employee, such as a diplomat or a member of the armed forces, who is working overseas and paid by the Government. • Spouse or civil partner or one of these people.

With Cash NISAs paying very little interest, it is possible to transfer some or all of your Cash NISA to a Stocks & Shares NISA without affecting any of your current years NISA allowance.

Capital at risk, investments and the income from them can fall as well as rise.

Investors do mot pay any personal tax on income or gains, but ISA's do pay unrecoverable tax on income from stocks and shares recieved by the ISA managers.


NISA changes

It is now possible to transfer to the remaining spouse on death the money built up in his/hers NISA without losing the tax free status on the money.

Example: Mr and Mrs Smith have £50,000 each held in NISA from previous and current tax years, Mrs Smith passes away her NISA can be transfer Mr Smith he now has £100,000 in his NISA.

It is also now possible to transfer stocks and Share NISA's to cash NISA.

Junior ISAs

Since 1st November 2011 Junior NISAs have offered parents a tax-free way to save for their child’s future.

The features of the Junior NISA are:-

• People are able to put money into a cash account or a stocks and shares account • Each child is able to have one cash and one stocks and shares Junior NISA at any one time • There will be a total annual limit of £3,720 for all payments into these accounts • Accounts will become full ISAs when the child is 18 • The accounts will belong to the child and they are not able to get the money out until they are 18 • Any money the accounts make will be tax free •

Anyone could pay into this investment with the knowledge that the money would not be available until the child is 18 but children who have a Child Trust Fund account are not eligible to have a Junior ISA.

Capital at risk:Investments can go down as well as up.

Regular Saving (monthly ISA)

Some clients do not have lumps sums or do not want to pay lumps sums into investments, these clients pay a regular monthly amount into their ISA’s. The advantage of investing like this in a Stocks and Shares ISA is “cost pound averaging”. We describe this as you are purchasing units when the market is high and when the market is low, taking an average of the two which in effect reduces the risk.

Capital at risk, investments and the income from them can fall as well as rise.


Investment Bonds

An investment bond is simply a single premium, non-qualifying, life assurance policy.

Investment bonds tend to be used for lump sum investments and they can have preferential tax treatment.

These investment bonds can be onshore or offshore and will incur different tax treatment.

A lump sum can be invested into the bond with various funds available and they can be for whole of life or have a fixed term.

Partial withdrawals can be taken from a bond and usually you can withdraw 5% of the original investment which is tax deferred, for example, and if you invested £100,000 you can withdraw £5,000 with tax deferment.

There are a number of funds in which bonds can be invested in. Your bond would be invested in a range of funds that most suit your attitude to risk and it can be written on a single or joint life and under Trust.

The minimum amount to invest into a bond is usually is £5,000 and the money is normally tied up for at least five years.

If you wish to encash the bond in full, you may find surrender penalties apply if the encashment is in the first few years of it starting. If you think you will need to encash the bond early then an alternative investment vehicle might suit you better.

When you decide to encash your bond, you need to be aware of any penalties. Depending on the fund's performance you may get back less than you put in.

Depending on your current and future income tax position, will influence any recommendation whether an onshore or an offshore bond would suit your requirements.

At the surrender point, the end of the term or on death, a lump sum will be paid out. This amount depends on the performance of the underlying investments or funds.

An analysis will be carried out to find which type of bond is best suited to the investor, obviously taking into account their current and future tax position.

Investment bonds are mainly used to reduce your tax position on encashment. When one is encashed, the growth on the investment is assessed against your income to see whether any income tax is due. For example, if you invested £100,000 and the bond grew to £150,000 over five years, the £50,000 would need to be added to your income for tax purposes.

As the bond would have been held for five years, however, it would be unfair to apply the whole gain to your income. A process called top slicing is completed and this calculates your tax liability, if any. It is a complex procedure but there are a number of ways the income tax position might be reduced. It is important to take financial advice about how and when to encash your investment bond.

The investment bond is deemed to pay basic rate income tax at source. Most bonds are used for higher rate tax payers who know at some time in the future their tax situation will reduce.

Capital at risk, investments and the income from them can fall as well as rise.

OEICs (Open Ended Investment Company).

Unit Trusts and OEICs

Unit trusts and Open-Ended Investment Companies (OEICs) are a professionally managed collective investment. Managers pool money from many investors and buy shares, bonds, property or cash assets and other investments. When you buy shares (in an OEIC) or units (in a unit trust), the OEIC or Unit Trust then passes your funds on to a fund manager.

The fund manager puts your money together with money from other investors and uses it to invest in the fund’s underlying assets. Every fund invests in a different mix of investments. Some only buy shares in British companies, while others invest in bonds or in shares in foreign companies.


Some funds give you the choice between ‘income units’ or ‘income shares’ that make regular pay outs of any dividends or interest the fund earns.


‘Accumulation units’ or ‘accumulation shares’ are automatically reinvested into the fund.

Income & Accumulation

Distribution units or shares which may pay out a combination of accrued income and capital augmentation at regular intervals.

You can sell your shares or units at any time. Bear in mind that the length of time you should invest for depends on what your fund invests in. If it invests in shares, bonds or property, you should plan to invest for five years or more.


Depending on the underlying investment, any income you receive could be subject to dividend tax or income tax. Partial or full encashment will probably mean the gain will be subject to income tax.

Capital at risk, investments and the income from them can fall as well as rise.

Endowment Policies

This is a type of investment policy that can be used as a regular savings plan, for an event or for a long term goal. They are set for a certain time period, for example, 10 or 15 years or for the length of a mortgage or a loan. Normally endowments are used for long term savings. At the end of the term, the plan will pay out a lump sum. Endowments also have a life cover element that will pay out on death.

As with any investment plans, the value of an endowment can go down as well as up.

You make monthly payments into the plan with part of the premium being used to buy the life assurance element. How much of the premium that is used to buy the life assurance will depend on your age, sex and how long the endowment is required. The remainder of the premium will be invested either on a With-Profits or a Unit Linked basis and the amount you receive in a lump sum at the end of the term will depend on the performance of the investments.

With Profits Investment

Your premiums are pooled with other investors’ money in a range of investments provided by the insurance company. These can range from fixed-interest investments, shares and property. The pool of money is used by the insurance company to run their business and the money that is left over (the profits), is shared between all of the investors by declaring bonuses. These bonuses will increase the value of your fund.

With-Profits investments are designed to grow steadily over time. The bonuses that are added cannot be taken away, although there may be a charge or a clawback of some of the bonus if the policy is encashed early. This charge is called a Market Value Reduction or a Market Value Adjustment. With-Profits investments are linked to the stock market, they have fewer ups and downs then if you were to invest directly into shares.

Unit-Linked Investment

With this type of investment you can choose where to invest your money from a wide range of funds. Some of the funds may be run by the insurance company or a range of unit trusts and open-ended investment companies (OEIC’s) may be run by a separate company. You can usually switch between funds without being charged, but be aware that some companies may charge a fee to switch more than two or three times.

If you choose to invest in Unit Linked investments, you need to be aware that you may get back less then you put in due to the performance of the funds you have selected. You can choose a variety of funds where some are more risky than others. As these types of plans are generally for long term saving, you should be aware of any exit charges should you wish to encash early. Also, various costs and charges are deducted from the investment before bonuses are worked out.

Endowments have had very bad press in recent years and are rarely taken out today and care must be taken about whether to maintain them or encash them.

Capital at risk, investments and the income from them can fall as well as rise.

Savings Accounts

Bank Accounts

There are two types of bank account that are mainly used; basic account and current account

Basic Bank Account: A basic account is ideal for those who just want to have their wages/salaries, benefits, pension payments or tax credits paid in to their account. They also do not provide an overdraft facility or a cheque book.

Cheques can be paid into the account free of charge; these normally take 3-5 working days to clear before you can spend the money.

Direct debits and standing orders can also be paid from this type of account, although, as it does not have an overdraft facility, if a direct debit or a standing order was due to be paid and there were limited funds in the account, the bank can refuse to pay and also charge you each time a payment does not go through. This is also a good starter account if you have been declined for a current account, if you have a low credit score and need a way to receive benefit payments or just want to control your spending. You need to be at least 16 to open a basic bank account, although at some banks the minimum age is 18. Basic bank accounts do not have a minimum amount to open or pay in each month which can be an advantage if you are on a low income.

When opening any bank account, you will need to prove your identity and address. For this, the bank will require a copy of your passport/drivers licence and a utility bill or some form of documentation that notes your current address. Some banks will carry out a full credit rating (this may affect your future credit rating) rather than an enquiry. They will advise you of this when you visit the branch.

You also need to make sure they provide all of the services you require, i.e. can you pay direct debits or standing orders, do you get a debit card and where can you use it. Please be aware that if you are opening another account with the same bank, and your existing account has a debt, the bank may use the funds in your new account to pay off the debt.

Current Account

A current account is very similar to a basic account but they tend to offer more features.

You can:-

• Receive payments, i.e. wages/salary, benefits, pension payments or tax credits
• Pay direct debits or standings orders
• Access your money whenever you like
• Make payments by credit card and cheque
• You can apply for an overdraft facility. This is where you can spend funds you do not have, although you need to be aware that the bank will charge you for the amount/time you are overdrawn. This feature is normally used for emergencies or if you do not have quite enough funds in your account to make a payment.

These types of accounts are quite popular recently as in addition to being able to deal with your day to day banking in the branch, they also offer an online facility. You can set up and make payments either via computer or mobile banking.

There are also other features that some current accounts offer that basic accounts do not, but you may have to pay a monthly charge for these:-

• Holiday, car or mobile insurance
• Car breakdown cover
• Higher rates of interest on loans and money
• Being able to cash foreign cheques

The bank does not usually charge for their basic services or withdrawing money from most ATM’s, but they will charge for overdrafts and some services like withdrawing money whilst you are abroad or drawing money on a credit card.

You must to be over the age of 16 in order to open a current account, some banks the minimum age is 18. If you are under 18 you may be able to open a current account with your parents’ help.
Normally, a minimum amount of money has to be paid into your account every month, either as wages/salary, pension payments, benefits or tax credits.

Savings Accounts

Most of the banks and Building Societies have a wide range of savings accounts. The general rule is that the longer you give up access to your money the better you interest rate will be. The disadvantages of many savings accounts are, at present the interest rates are poor so after you take your tax position into account and inflation your money is not growing for example:

Savings rate of 2%
Basic rate tax payer has to pay 20% in tax which the bank will deduct at source 1.6%
Inflation (Consumer price index) is currently running at 1.9% as of January 2014
Therefore the real effect on your money is that it is reducing in its spending power by 0.3%.
The advantage is that the funds are readily accessible and the capital is safe.


National Savings and Investments (NS&I)

NS&I is an organisation that is back by a Government Guarantee. It offers a range of savings and investment products.

Direct Saver – a savings account
Direct ISA (Cash ISA)
Fixed Interest or Index-Linked Savings Certificates
Guaranteed Growth Bonds and Guaranteed Income Bonds
Guaranteed Equity Bonds
Income Bonds
Children’s Bonds – a tax-free savings product for children under 21
Premium Bonds

The way in which an NS&I investment works is that you are lending the Government money but it is totally secure. Some products pay interest, stock market or inflation-linked returns (income) or, in the case of Premium Bonds, tax-free prizes. As your cash is backed fully by the Government, you will get back however much you paid in. It is therefore a safe investment vehicle if you do not want to put your money at risk.

If you invest in cash based product and inflation is high, your money might not hold its value in real terms - in other words its ‘buying power’ may reduce. If you think you may require quick access to your investment, you may need to look carefully at the type of savings vehicle you choose. Some accounts have immediate access but investments like Bonds and Savings Certificates, these can be encashed early, but may incur a penalty. One of the attractions to an NS&I Account is that there are no explicit charges.

Some NS&I accounts pay out returns free of tax:-

Premium Bonds

Fixed Interest and Index-Linked Savings Certificates

Children’s Bonds and ISAs

Guaranteed Income and Guaranteed Growth Bonds pay returns at the basic rate of income tax, currently 20%. This is deducted at source, i.e. before it is paid to you. Non-taxpayers can reclaim this tax back. For other products, returns are taxable but paid ‘gross’ (without tax taken off). If you’re a UK taxpayer, you have a duty to declare the income to HM Revenue & Customs and pay any tax you owe.

 The Financial Conduct Authority does not regulate Nation Savings, Bank or Deposit Account Advice, Taxation or Trust Advice.

EIS (Enterprise Investment Scheme) and VCTs Venture Capital Trust

EIS (Enterprise Investment Scheme)

This is a Government initiative designed to encourage investment in small unquoted companies. The investment has to be held for three years and attracts 30% tax relief after three years. There is no Capital Gains Tax on disposal and the maximum investment is £1,000,000 per annum. The investment purchases shares in unquoted or unlisted companies and an EIS also qualifies for business property relief.

VCTs Venture Capital Trust

The investment has to be held for five years and attracts 30% tax relief but this is a higher risk investment although with possible higher returns.The maximum investment in to a VCT is £200,000 in a tax year.

Venture Capital Trusts (VCTs) are listed companies that are run by a fund manager and which, in turn, invest mainly in smaller companies that are not quoted on stock exchanges.


The tax relief on Venture Capital Trusts comes in a number of different forms and with varying risks. The Income Tax relief is 30% on a maximum investment of £200,000 per tax year when you buy newly-issued shares and this is claimed back if you sell your shares within five years, unless you sell them to your spouse or if you die.
Tax relief is provided in the form of a tax credit to set against your overall income tax liability in the tax year. The amount of the tax credit cannot, therefore, exceed your total income tax liability for that tax year. Dividends from investments in VCTs do not attract income tax, provided the original investment was made within the permitted maximum of £200,000 per year.

You will not have to pay any Capital Gains Tax on gains from investments in Venture Capital Trusts and there is no minimum holding period for this rule to apply. But if your VCT investments make a loss, you cannot use this to reduce your Capital Gains Tax bill from other investments.

EIS's and VCT's invest in assets that are high risk and can be difficult to sell such as shares in unlisted companies. The value of the investment and the income from it can fall as well as rise and investors may not get back what they originally invested, even taking into account the tax benefits.

Ethical Investment Options

If you had the choice would you want to invest in an Ethical fund?

Given the option would you like to incorporate any ethical, social or responsible values you hold into your pensions and investments?

Ethical funds have developed over the past 5-10 years as demand has grown.

The most common approach to this type of investing are:

       Responsible Leaders – Invest in leaders within Environmental, Social and Governance (ESG) areas and in so doing encouraging positive change.

       Sustainability Leaders – Invest in leaders within Sustainability or the Environment.

       Ethical Leaders – Invest in companies with a balanced consideration of positive and negative factors such as Armaments, Human Rights and Animal Testing.

       Traditional Ethical Leaders – Invest with a clear commitment to a range of ethical values, focusing on avoiding a wide range of areas of possible contention.

There are many ethical, sustainable and reasonable funds available on the market and we are able to build bespoke portfolios for you.

Ethical  Investments, like other types of investments, can go down as well as up and your capitail is at risk.

Capital at risk, investments and the income from them can fall as well as rise.

Level basis and rates of tax can change without notice and these will depend upon your personal circumstances which can also chnage.

The value of investments and the income they produce can fall as well as rise, you may get back less than you invested.

If you would like to invest - call us on 01752 896943

As part of the Quilter Financial Ltd we can now offer even more competitive financial products. Contact our office on 01752 896943 and we can make an appointment to review your current financial situation including any existing policies. 


It's rarely too late to make plans and as part of the Quilter Financial Ltd we can now offer even more competitive financial products. Contact John and Adam and we can help you - our clients come from all walks of life, some wealthy, others are ambitious, some just need our occasional help but we offer practicality, confidentiality and honesty.

The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK. Further consumer information is available from the Financial Conduct Authority via the following link - click here