What you do with your money today could have an impact on your financial future. Think about a financial ripple effect, picture throwing a stone into water and how this spreads outwards into bigger circles – could your money do the same when invested?


Time makes a difference

Every investment starts with a goal – what is it you want your money to grow towards? For example, you might want to grow a fund to live off in your retirement.

You may think that the big difference maker may be how much you put into your investment. Yes, it matters, but what is also an important factor is the time you are invested.

An investment takes time to grow, so even little amounts invested early enough could be worth significant amounts when you think of decades within a Pension. You may be better off putting a little into a Pension regularly from your twenties, rather than looking to cram in bigger sums in your later more affluent years. This is because money invested towards the end of your investment may have less time to grow, whereas money invested with plenty of time on your side could grow and benefit from growth and compound growth. However, there are potential downsides you must consider when weighing up the pros of long term investing in a Pension. You can’t access the money until you are 55, which is rising to 57 in 2028. If you are young you may need access to money for other goals such as buying your first home or marriage. Other investments such as an ISA may suit shorter term goals. With investing there is no guarantee of returns, past performance isn’t a guide to future performance.

Even if you feel like you are advancing in age, it is still the case that today is the youngest you’ll ever be, so any money invested could benefit from time in the markets rather than delaying. Simply put, when it comes to compound growth in an investment, the earlier you start is the better.


Pay off your debts

One of the drags on your financial future could be debts such as credit cards and loans that aren’t paid off. The rate of interest on debts could mean that your wealth is actually going backwards over time and any investments could be cancelled out by debts that are growing quicker than investment growth.

Consider how you could reduce your debts and set out a plan where to clear them.

However, not all debt is bad debt, credit cards can be useful if used responsibly, and a debt such as a mortgage is an effective way to attain a high value asset that could grow in value.


Investing is all about good habits

Every day is an opportunity for self-improvement and establishing a good investment habit may mean you can build a wealthier future.

Start today with a simple action, such as deciding to invest a little into your investment at the start of every month. This is known as paying yourself first, you invest disposable income into your investment before spending on other leisure activities. The idea of paying yourself first is that one day this investment could grow into a greater sum.

You could even choose to automate your investment, making certain you good habit is adhered to, by setting a direct debit into your investment.


Increase your Pension contributions

One of the most simple and effective ways to invest in a tax efficient way over the long term is through Pension contributions.

Increasing your Pension contribution by even just a small percentage could make a big difference over time. Not only could this money grow in an investment, you are also benefiting from tax relief on your contributions.


Set your Pension beneficiaries

As you build wealth in your Pension, it is important to consider what would happen to this money if you died.

You can name Pension beneficiaries through an expression of wish with your Pension provider. This is a simple step you could take today that would make a potentially important impact on your future, as money passed on through a Pension isn’t normally liable to Inheritance Tax.

It may also be important to name beneficiaries sooner rather than later as there’s no way of knowing when you may die. In the event of a sudden death, you want to ensure your wealth would be passed on as you would have wished.

It is also important to set a Will up, to make sure your wealth is passed on in a tax efficient way and as you would have wished.


Speak to a financial adviser

One of the reasons people may put something off is because it feels uncomfortable or because they don’t fully understand the subject. This can sometimes be the case with personal finances, where it can be uncomfortable to think about issues such as debt or if your Pension pot is big enough.

Speaking to a financial adviser may be a good idea if you are unsure of what to do, and sometimes it may be the case that after putting your finances off it turns out that things were more straightforward than you realised. A simple and effective plan can help you get on track to your goals, so start today and see how you can do more with your money.


With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest. Pension eligibility and tax rules apply. Tax is subject to an individual’s personal circumstances, and tax rules can change at any time. This blog is not personal financial advice.

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