It's Never Too Late To Make The Most Out Of Your Savings

With the Individual Savings Accounts (ISAs) deadline looming, it may actually be more prudent for savers to direct their attention to their existing ISA savings.

Since ISAs were introduced in 1999, a saver could have placed more than £61,000 into a tax free Cash ISA. However in those 15 years, savers will have been lucky to achieve a TOTAL 'real' return (i.e. factoring in inflation) of between 6-7% and as a result rock bottom interest rates, a 'real loss' exceeding 0.3% over the last 4 years.

Compare this to the FTSE where investors could have expected to achieve a real return closer to 10% over the same 15 years or 15% over the last 3, the figures speak for themselves.

Most cautious investors don't expect a lot but they do want to shelter their funds from inflation and achieve at least a small return.

Consider the impact on the accumulated value of both PEPs and TESSAs which could potentially be in the region of £100,000s.

One place that could offer returns in excess of bank interest and protect against the effects of inflation are risk constrained funds.

Driven by recent legislation changes (mainly the Retail Distribution Review), we have seen the numbers of these types of funds almost double in the last three years.

At Nurture Financial Planning, we offer risk constrained funds tailored to suit your own risk profile. Sometimes known as Risk Targeted, these funds will impose maximum volatility levels, effectively capping the amount of risk a fund is exposed to.

The effect is generally a smoother investment run when compared to a traditional equity fund for example. Funds can be multi-asset allowing greater diversification.

So although there is the annual deadline of 5 April to make new contributions to ISAs, perhaps the focus should be on what the benefits of transferring existing Cash ISAs and Stocks and Shares ISAs to this type of arena could be.

Transferring accrued ISA monies can be done at any time with no deadline. Transfers can be made whilst retaining the tax privileged ISA wrapper.

By taking just a small, controlled level of risk, investors have the opportunity not only to fight the affects of inflation but also to achieve a real return.

For more information, please contact your usual adviser, email us, call 01603 673502 or visit our website to download our latest Investment Guide.