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Richard's story

Richard is self-employed and has a range of accounts with HL to help him make the most of his tax allowances at the start of the tax year.

Please note: This case study isn’t personal advice. If you’re not sure what’s best for your situation, ask for financial advice. Investments can go up and down in value, so you could get back less than you invest.

"I’m a self-employed consultant in health and safety and have been doing this for the last 10 years. I’ve been self-employed fully since leaving salaried work in April 2008, having had various roles in different industries.

I wanted to start investing money in 2011 with a view to building up significant funds and have the flexibility to be able to save and invest for the future. At the time I was just really getting started with investments so didn’t have a definite plan other than building up as much as possible and setting targets. I also wanted to be able to take advantage of tax-efficient ways to save and invest. That’s why I opened my Self-Invested Personal Pension (SIPP) in 2012. This is used as my main pension as I don’t have a workplace pension being self-employed.

My parents had Hargreaves Lansdown (HL) accounts, so it was natural I started my investment journey with HL too. They have a good reputation as a provider in terms of financial stability, good customer service, an extensive range of financial instruments to invest in and a clear charging structure. I was using another investment provider in the earlier stages, but I found HL better. This is one of the main reasons I consolidated my investments across due to better customer service, a better platform, easier to invest with and some elements of dividend reinvestment.

Why I make the most of my tax allowances early

Concentrating on investing at the start of the tax year means it is easier to set aside the money and ensure it is ‘locked away’ as a priority, particularly in my SIPP. There is no temptation to spend the money or withdraw any so it can be allowed the potential to generate maximum returns.

My income levels are consistent so it’s fairly easy to predict my earnings over the year. This means I can immediately put a significant amount into my SIPP early on in the tax year. I’m in a fortunate position that I can also maximise my ISA at the same time. This means I can maximise the potential return on investment throughout the whole financial year.

Compound interest over time is the most powerful factor in all your investments. I have seen huge returns on investment through this over the past 13 years. By investing at the start of the year you provide the best chance for all your investments to grow and take advantage of the whole year as opposed to missing out on potential gains. This also is compounded with the additional tax relief provided through the SIPP.

I haven’t always been able to add money at the start of the tax year though. Things have changed vastly over the past 13 years. When starting out I could only afford £50 a month in different accounts, moving to £300 then £500 over time. I did not even manage to open an ISA until 2014.

I understand that it’s not always possible for people to make the most of their allowance early. However, you could be missing out on giving your investments the longest chance to possibly grow. In addition, it helps to practise good financial discipline and focus your mind on prioritising saving and investing.

How HL's tools and guidance helps me invest

There’s so much useful information that is accessible and proactively provided by HL for a range of investors. The information provided is appropriate and comprehensive. HL seem to be the only investment provider that actually provide company information, insights, market information and even tax and budget implications for all investors.

I’m also subscribed to the daily roundup of stock information and other features which provides an in-depth analysis of my shares or funds. The level of analysis is extremely good and provides accurate data and views on specific companies and in some cases funds.

I have the HL app installed and check it on a regular basis. It is very good and provides full account details in an easy-to-use format. It allows everything from being able to see account performance at a glance to full details such as all transactions and detailed individual holding metrics. You can even trade live and direct using the app, in addition to top-up or move money and investments.

It is very easy to add money to any account. I like the ability to just add money directly from a bank account, use a debit card or set up regular investing. I always used to use regular investing to ensure I set aside money each month to top up accounts. It is easy to use and can also be used to increase or decrease the amounts regularly invested on a monthly basis if required. Now I can just transfer the amounts required without issues. The money appears in the account instantly and is available for investing.

I’ve had an HL ISA for 10 years. It’s a great vehicle to build up money for the future in a tax-free account.

I opened an HL Stocks and Shares ISA with small amounts of money and the flexibility of the account has allowed me to keep adding on a monthly basis, even varying the amounts where required. This has built up to significant amounts over time. Now, I am in a good position to be able to maximise the allowance annually and will continue to do so for the foreseeable future. I enjoy the wide range of stocks, shares and other financial instruments you can invest in. These include American stocks and shares with a simple process provided by HL allowing access. It was easy to open, provides useful information on performance including detailed X-ray analysis of all holdings. It is also easy to see at a glance exactly how much allowance you have left to contribute and can be used as part of the share exchange system which is good for maximising transfer from my Fund and Share Account into the tax-free ISA.

Building a strong ISA is a key component in my financial plan. Initially I just wanted to save and invest some money and the ISA was an ideal vehicle to build up tax-free funds so they can grow without any penalty. I have a SIPP and Fund and Share Account but the ISA will allow me to withdraw funds in the future to supplement early retirement. This will mean I don’t necessarily need to withdraw from my pension and can have various amounts without any tax implications.

Why I opened an HL SIPP

Having been self-employed since April 2008 there was no further company pension or contributions, so I did not have any pension for the future other than an employer scheme from when I originally worked in paid employment.

I did not want to be left with a small pension from this as my only potential source of future retirement income. It took until 2012 before I finally managed to open an HL SIPP and be able to meaningfully contribute to it.

The HL SIPP is a fantastic vehicle which offers ultimate flexibility and a range of benefits. I have the option of a wide range of products which I can invest in. They also automatically claim back basic-rate tax relief on my behalf and add the funds to the account. One great feature I used was to transfer my previous work pension directly into my HL SIPP and have the funds to manage myself. HL made the process very easy, and I got the entire workplace pension transferred with very little paperwork and good support from HL.

It can be daunting to start with as there are such a wide range of potential investments made available by HL. Over time you will gain knowledge and experience and using the HL SIPP has improved my financial knowledge significantly. It also helps you remain much more in control of your own financial future. I am confident that HL can support my financial journey as they have done up to this point. I will achieve early retirement which will be 55 or 57 (due to pension access age changes in 2028).

HL's Share Exchange Service allows me to maximise my tax-free allowances

I wanted to maximise the tax-free allowances available in both the SIPP and ISA and having significant amounts in my Fund and Share Account means I can use the Share Exchange Service to move investments across to the tax-beneficial accounts while retaining the same investments. It also reduces charges and HL provide a great service meaning it is really easy to use. In addition, the service is extremely quick and the whole process takes place seamlessly.

I would absolutely recommend HL’s Share Exchange Service to others. If you have a need to move investments to more tax-effective accounts and want to keep largely the same investments it makes the process extremely easy and time efficient.

HL is without doubt my investment provider of choice

What is important to me as a long-term investor is the stability of the company, quality of service and useability of the platforms provided. HL has extremely good customer service where things are performed exactly as they should be. The vast range of products and services is important to me including the ability to invest in products that may be outside the UK. HL provides the ability to do all of this and more. They actually made investing easy when I had very little to invest and make it easy with much larger and complex investments. I felt valued as a very small investor and feel confident as a serious investor in their services. The platforms are extremely good to use as they are both easy and provide full details and financial information in as much detail as you require. Their services have been very good with everything from American share investing to using the bereavement service.

Unfortunately, my mum passed away in May 2022 which was sudden and unexpected. HL were extremely supportive when my dad had passed away 6 years previously to allow all my dad’s investments to be integrated into my mum’s ISA. They both had used HL for decades for virtually all their investing. HL were extremely helpful in providing a valuation for the entire portfolio and gave helpful advice over the phone. They also gave us a substantial range of options on what to do with all the investments. My sister (who also uses HL) and I discussed these and opted to take all the investments exactly as they were split between us. These all moved directly into our Fund and Share Accounts. Everything was worked out exactly and every penny accounted for. This process did not take long once the legal requirements were finalised. They also helped with filling in the valuation of the estate."