Keep on track to reach your financial goals.

As an investor, whether you are saving for retirement, looking to pay off your mortgage, or you’re simply looking to grow your wealth, remaining invested over the long-term can potentially give your money a chance of growing in value.

We’ve put together a checklist below, covering tax-free allowances, direct debit contributions and the benefits of investing little and often to help you stay on track to reach your financial goals.

Maximising your tax-free allowances.

By using your tax-free ISA allowance before the tax year ends on April 5th, you can give your investments more opportunity for potential growth and protect your invested funds from Income and Capital Gains Tax. ISA allowances are reset every tax year, meaning you can’t carry forward any unused allowance into the next tax year.

You do not pay tax on:

• Interest on cash in an ISA
• Growth on your investments held in an ISA

The ISA allowance for the 2024/25 tax year is £20,000 in one type of ISA account, or alternatively you could split the allowance across some or all of the other types. [1]

Additionally, you can also pay £4,000 into your Lifetime ISA in a tax year until you’re 50, separate from the tax-free ISA allowance. However, you must make your first payment into your ISA before you’re 40.

By also contributing to your Pension pot, you can not only protect your money from Income and Capital Gains Tax, but your contribution may also be eligible for tax-relief of 20% (or more if you’re a higher or additional rate taxpayer). This means if you add £800 net to your Pension this tax year, Government tax relief could take your total contribution to £1,000 gross.

The Pension annual allowance is the most you can pay into your Pension pots in a single tax year, and still benefit from tax relief.

You’ll only pay tax if you go above the annual allowance, which is set at £60,000 for the current tax year. [2]

The tax year runs from April 6th to April 5th.

Regular investment by direct debit.

You can also turn your top ups into regular contributions by direct debit. By setting up a recurring direct debit, so you can invest regularly, you are potentially giving yourself the best chance of reaching your financial goals.

By automating your investment, you are basically investing on auto pilot. Establishing this habit means you are paying yourself first – putting money towards your future that over time could potentially come back to you with greater value.

There are also no initial charges, while you can set a collection date that suits you as well as having the flexibility to amend or cancel at any time.

Investing with impulseSave®.

With the use of technology, you can invest small amounts little and often. This allows you to build up a larger sum over time while getting into the habit of regularly adding to your investments.

You can use impulseSave® to top up a Stocks & Shares ISA, Personal Pension and General Investment Account at the touch of a button, with as little as £1. Since its launch, over £1 billion has been invested through impulseSave® – with half of all top-up amounts being under £100. [3] With investing, capital is at risk.

Set up your cashback to auto invest with True Potential Rewards.

Exclusively available to our clients, True Potential Rewards is an exciting feature created to help you earn cashback on your everyday spending at your favourite online stores. You can then automatically add that cashback to your investments to move one step closer to your financial goals.

Available through your online account and app, True Potential Rewards offers cashback deals from brands such as Just Eat, H&M, Nike, TUI, Curry’s, Morrisons and many more.

You can set up your rewards cashback to automatically be invested into your chosen Pension, ISA or General Investment Account, helping you move closer to your financial goals. As well as setting it to automatically invest, you can also withdraw your cashback to your bank account. It’s important to remember, however, that with investing your capital is at risk.

The importance of completing an Investment Review.

Whether it’s your employment status, income, financial goal, assets and investments or long-term plans, circumstances can easily change and it’s important to address these changes and adapt accordingly.

Your annual Investment Review gives you the chance to examine your current situation by reviewing the investments and Pensions you hold, as well as progressing towards your long-term goals. You’ll see an overview of your investments and their total value, as well as tracking how the value has changed over the last 12 months.

When your Investment Review is due, we’ll send you a letter, email and text letting you know. Completing your review is simple – just log in through your app or online account and you’ll see a banner on the overview page.

Upon completion, we’ll produce an Action Plan personal to your circumstances. The Action Plan lays out simple steps that, if taken, could help you reach your investment goals sooner and get the most from our service. The plan is available in your app and online account at any time.

Take advantage of our advice offering.

If you are a True Potential Wealth Management client and need assistance with your financial plan, investments or account, we’re here to help. We provide a range of services across inheritance, tax planning, retirement, Final Salary Pensions and more.

On the app, select the ‘Advice Services’ page near the top of your screen. If you’re logging in via your online account, select the menu on the left-hand side of your screen and click ‘Advice Services’.

If you’re a True Potential client and would like further support with your investments, you can also call our Relationship Management team on 0191 500 9164.

They’re available 7am – 8pm weekdays and 8am – 12pm on Saturdays. If you’re not a client, you can call one of our experts on 0191 625 0350 to learn more.

[disclaimer]With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest. This material is not a personal recommendation or financial advice and the investments referred to may not be suitable for all investors.

Tax is subject to an individual’s personal circumstances and tax rules can change at any time. ISA eligibility and tax rules apply. You should ensure your contribution does not result in your total ISA contribution within the tax year exceeding £20,000.

Pension eligibility and tax rules apply. You should ensure your contribution does not result in your total Pension contribution within the tax year exceeding £60,000 or 100% of your earnings, whichever is lower.

The terms and conditions that apply to True Potential Rewards are available in the Documents section of your account. If you choose to invest your cashback, your capital will be at risk.

 

Sources

1 https://www.gov.uk/individual-savings-accounts/how-isas-work#:~:text=Putting%20money%20into%20an%20ISA,pay%20in%20is%20%C2%A34%2C000.

2 https://www.gov.uk/tax-on-your-private-pension/annual-allowance

3 This information was sourced from True Insight Summer edition 2024

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