Today there are a bewildering range of savings vehicles available, and it is difficult to know which option to choose. Your savings go a lot further if you save tax efficiently and so we encourage saving through Individual Savings Accounts (ISAs) wherever possible. If you have used your annual ISA allowance, alternative methods of saving include unit trust plans and tax-efficient friendly society policies.

 

Individual Saving Accounts. You are currently able to invest a total of £7000 per tax year into an individual savings account.  A maximum of £3000 of this amount can be held in a cash ISA with the balance being held in stocks or shares.

Everyone is looking for an ISA fund which is safe, in the sense that its value cannot fall, and at the same time offers guaranteed excellent returns. This ideal combination does not exist, and it is wise to beware of anyone that says that it does. An investment strategy must be planned, which takes into account your attitude to risk, the length of time you have to invest and the investment goals you are saving for.

Unit Trust Plans. Unit Trust plans are similar Individual Savings Accounts, but they have no investment limit of £7000 and they are not quite as tax efficient. Hundreds of unit trust funds are available covering many different types of asset, company and geographical region.

Tax Efficient Friendly Society Plans. Every adult and child can invest £25 per month, or £270 per year into a tax efficient friendly society plan. These plans run for a fixed period of time, and guarantee a minimum payout on maturity, or on death.