It’s important to identify your financial goals – both current and future.
Like many people, different portions of your money may be earmarked for different types of goals that will be achieved over different timescales.
One useful exercise is to consider the way you store your food at home:
Easy-to-get to cash for things like emergencies, hobbies and home repairs.
It’s important to have some money in an easy access account – to help prepare you for any unforeseen circumstances. In a deposit-based account the risk is very low, however, the returns are limited to the relatively low interest rates they offer.
Short-to-medium term savings for things like travelling, weddings and new cars.
For financial needs up to five years away, savings products like a fixed rate bond could offer a higher interest rate than an easy access account. As they involve tying your money up for a certain period, you need to be confident you won’t need access to it in the meantime.
Long-term saving for things like retirement, inheritance and second homes.
This is typically for anything that is at least five years away. With long term investments linked to the stock market, you’ll need to accept the risk that your money can go down as well as up in value and you could get back less than you invested. There are no guarantees, but investments linked to the stock market offer you the potential to achieve greater long-term returns than both easy-access and short-term accounts, based on current interest rates.
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For more information on our service and to find out whether you could benefit from financial advice, call our specialist team today for a free consultation over the phone on
0800 731 5342 or request a call back.