Posted on: 12 May 2016
Wealth planning is all about helping you to achieve your needs and objectives. An important part of overall wealth planning means understanding the most effective approach to meet both your short and longer-term commitments - this will include covering expenditure in the next five years and also having the flexibility to plan for any unforeseen expenditure for you or your dependants.
Investing in stock markets may be the right answer if you have capital which you are able to invest over a longer period. Generally the equity stock market can experience periods of volatility and may not allow you to maximise market opportunities if investing for less than five years.
We often refer to shorter-term cash savings as ‘rainy day’ funds or emergency reserves, but really they are just expenditures that can happen unexpectedly. For example, needing to buy a new car, paying for expensive medical care or supporting a family member through a crisis. Shorter-term reserves need to be liquid and easily accessible to meet these needs.
In the design of our overarching approach to wealth management at Duncan Lawrie, we have designed a range of savings and deposit accounts - not only to help cater for your short-term savings needs, but to also help you diversify your wealth, manage risk and simply provide you with more options to help you to manage liquidity.
In this month’s Commentary, ‘Piquing the nation’s interest’, is looking at the future outlook for interest rates in the UK which are on hold for now. We know rates have been at historic lows for some seven years, so you may well be considering the value of cash savings.
Cash savings may not be for everyone, but it is important to look at a range of assets when considering what you are working to achieve and to consider those which are more suitable for short-term needs and tend to be more accessible when funds are needed immediately. And the UK Government appears to agree, having introduced a new Personal Savings Allowance (PSA) which allows basic-rate taxpayers to earn up to £1,000 a year in interest tax free and higher-rate taxpayers up to £500 a year in interest tax free.
Of course, cash savings must be considered as part of the greater wealth planning strategy, but they do have a place – like all the jars on the mantelpiece.
If you would like any further information about our range of savings and deposit accounts, you can visit our website at www.duncanlawrie.com/deposits. To talk more about wealth planning in general, please speak to your Relationship Manager.
All data has been compiled by Duncan Lawrie from sources believed to be reliable. Full details of sources are available on request.
The comments and figures in this document are generally applicable but you should always take specific advice to suit your individual circumstances before taking any action. Errors and omissions excepted.
The value of investments and income generated may fall as well as rise, and investors may not get back the amount invested. Past performance is not a reliable indicator of future results.