Archive for May, 2017

An introduction to the Lifetime ISA

Posted by Sam Binstead

The new Lifetime Individual Savings Account (or ISA) is designed to help young people save flexibly throughout their lives for the long-term.

Individuals over the age of 18 and below 40 are able to open a Lifetime ISA and pay in up to £4,000 each tax year. They will be able to continue making contributions up to the age of 50. The government will add a 25% bonus to these contributions.

Tax-free funds, including the government bonus, can be used to help buy a first home worth up to £450,000 at any time from 12 months after first saving into the account.

If not used for first home purchase, the funds, including the government bonus, can be withdrawn from the Lifetime ISA from age 60 tax-free for any purpose.

Savers will also be able to make withdrawals at any time for other purposes, but with a 25% government charge applied to the amount of withdrawal. This returns the government bonus element of the fund (including any interest or growth on that bonus) to the government plus an additional charge.

Whilst Lifetime ISAs are not going to be suitable for everyone, they may be particularly effective in selective circumstances, including:

– To help a child or grandchild aged 18 or over to fund a deposit for their first home.  It may be that monies already saved for the young person could be paid into a Lifetime ISA in their name to benefit from the government bonus.

– For individuals currently below the age of 40 and who are already fully funding pension contributions, likely to exceed the pension lifetime allowance or not eligible to fund large pension contributions themselves (such as non working spouses) but wish to save for their long term future

What is socially responsible investing?

Posted by Sam Binstead

Ethical investment – or Socially Responsible Investing (SRI) – has moved from the sidelines to become a credible option for forward-thinking investors. In the past, when making the decision to invest ethically, many investors had to decide between profits and principles. Ethical screening was conducted on negative, rather than positive, criteria, with a focus on filtering out “bad” companies rather than seeking those that were making a positive contribution to society.

Today, ethical investment strategies have evolved. An effective socially responsible investing approach is designed not just to screen out undesirable companies, but also to pinpoint desirable ones. Positive social themes can provide valuable stimulus for product innovation; meanwhile, asking challenging questions provides scope for fund managers to identify potential opportunities at an early stage in their development.

To meet the growth in demand from both individuals and advice professionals alike, there is a much broader range of investment companies managing SRI funds today. We are finding our clients are much more open about considering socially responsible investing within their long-term pension and ISAs investments.

As well as creating bespoke ethical investment portfolios for those clients who have specific religious or ethical requirements, at Chilvester we have also developed a range of three socially responsible investment strategies combining selected funds from top investment houses to create our Cautious, Balanced and Aggressive ethical portfolios.

If you would like more information about our investment strategies, be they ethical or traditional, speak to one of our investment experts today.

 

The value of a fund, and the income derived from it, can decrease as well as increase and you may not necessarily get back the amount you originally invested.

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