Why save and invest in 2023?

The turn of a new year presents itself as a chance to go on a journey filled with new and exciting opportunities: a new job, a big lifestyle change, or even a chance to pick up a new hobby.

But have you ever thought about how it could be a great time to change the way you think about your finances and future plans too? A chance to look forward and concentrate on trying to create the best possible future for yourself.

It’s an opportunity to consider your long-term goals alongside your financial situation, something that’s clearly important. Especially at a time when high inflation could have an unintended impact on your financial future.

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There's a lot to think about. For example, your retirement. It’s one of the biggest long-term financial goals you’ll plan for. Despite this, it can be easy to underestimate the need to save for such an important part of your life. Research by Retirement Living Standards found that in 2022 a couple needs £54,500 a year for a comfortable retirement with more financial freedoms and some luxuries – and that could be for a period of around 20-30 years.

It’s not just about retirement either, there are lots of things that could shape your long-term goals. A short planning exercise can help you to make a good start on thinking about what you’d like to achieve.

Time to get planning

First off, do you have an emergency fund in place? This is money available if you were to receive a financial surprise, to cover any one-off costs. For example, if the car was to break down or the boiler needed replacing. Even if you don’t need to use it, having this back up can offer you valuable peace of mind.

Next, it’s worth thinking about what you want to achieve over the next couple of years. A big family holiday or a new car, for example. Do you have plans in place to pay for these, and what is this money currently doing?

Finally, there is your longer-term outlook. Where do you see yourself in five years’ time and beyond? It could be planning for your dream retirement; financial support for children or grandchildren; or that dream holiday home you’ve always wanted.

Investing could help you to build up your wealth for the future and bring your goals to life. You’ll need to be comfortable taking some risk with your money and be prepared to invest for at least five years – but these are things an expert could help you navigate.

A Stocks and Shares ISA could be a potential option for your long-term goals – especially when it comes to investing tax efficiently. With an ISA you can invest up £20,000 each tax year and the returns you make are free from tax.

The next steps

Planning for your future requires proper consideration, skill and knowledge. To get off to a good start it’s important the next steps you take are in the right direction.

Speaking to a Skipton financial adviser could make a big difference – especially when it comes to planning your finances in a way that suits your personal needs and that you’re comfortable with. We'll take time to find out about you – from your current circumstances to what it is you’d like to achieve later down the line. This is all so we can build a financial roadmap that’s tailored to your needs.

Our recommendations are likely to include stock market-based investments. These are not like bank and building society savings accounts as your capital is at risk and you may get back less than you invested. The value of your investments and any income from them may fall as well as rise. With Skipton, you’ll need to have £20,000 available to invest or reinvest, or be happy to invest £500 a month.

Get in touch and get started

For more information on our service and to find out whether you could benefit from financial advice, call our team today.