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Financial adviser’s 3 investment tips for the 2024 General Election

As we get closer to the 2024 General Election, we share three expert investment tips from a financial adviser.
Woman meeting for financial advice- GettyImages

Important information - This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Paul Crossan is a Chartered Financial Planner who specialises in retirement planning, wealth management and estate planning. Read his profile.

The 2024 UK General Election is just over a week away.

We’ve seen plenty of party pledges, from the State Pension triple lock and lifetime allowance guarantees to promises of no income tax rises.

However, no matter who ends up in Number 10, there are no guarantees what we’ll see from a new government. That’s why it’s important to not make any snap decisions – from your finances to your investments.

Here are three investment tips on how to approach the General Election.

Explore our 2024 General Election hub

Get our latest insights on what the General Election could mean for you and your money.

This article isn’t personal advice. Unlike the security offered by cash, all investments can rise and fall in value, so you could get back less than you invest. If you’re not sure what’s right for you, ask for financial advice.

ISA, pension and tax rules can change, and any benefit depends on individual circumstances. Remember, you can’t usually take money out of a pension until at least age 55 (rising to 57 from 2028).


Don’t Panic

The announcement of an election is significant news, but it’s important to maintain a steady investment approach.

Knee-jerk reactions are unhelpful, and selling during periods of volatility usually means you lose money in the long run. Investing in the stock market should always be viewed as a long-term strategy.

The University of Plymouth analysed the performance of the FTSE 100 in the three months before, during and after the last nine general elections.

It found the percentage of positive returns in the FTSE 100 three months before an election was 56%. During an election, the FTSE 100 had positive returns 67% of the time, and in the three months after an election the UK’s blue-chip index posted positive returns 56% of the time.

Past performance isn’t a guide to future returns.
Source: Bloomberg, 31/05/2024.

These results aren’t particularly revealing. While the media and the nation might become obsessed by politics during a general election cycle, the impact they have on financial markets, especially Britain’s blue-chip index, are difficult to ascertain, at best. Remember, past performance isn’t a guide to the future.

Tip 1

Stick to your investment plan. Short-term political news rarely has a lasting impact on the market. Staying invested over the long term usually yields better results.

While riding out periods of volatility can be uncomfortable, being prepared to do just that might well deliver better overall gains over the course of your life.

Stay connected with your financial adviser to make sure your portfolio aligns with your long-term goals. With the polls proving to be unreliable at best, predicting the outcome of the election is virtually impossible.


Take a long-term view

With UK stock markets touching all-time highs, rising consumer confidence and economic growth outpacing the US and Europe recently, the Conservatives might have deemed now as good a time as any to call a snap election.

Despite the election buzz, the core factors driving investment markets remain steady. The recent FTSE 100 market recovery to new all-time highs is promising for UK investors and it indicates a strong environment for investors – of course this isn’t guaranteed to continue.

Tip 2

Strong economic indicators can provide good investment opportunities. Diversify your portfolio to capitalise on market strength while managing risk. As always regularly review and adjust your investment strategy.

It’s also worth remembering that we live in a global economy and the UK market is only one part of the larger global investment universe.

Other indices across the globe are unlikely to be impacted to any large degree, if at all, by political events in the UK.

A well-diversified portfolio can help smooth your investment experience, especially during times of instability.

Get investing in the UK – our latest investment ideas

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Plan your ISA and pension contributions

With potential tax changes on the horizon, using your ISA and pension allowances now could be advantageous.

Whether you choose a Cash ISA or a Stocks and Shares ISA, making your investments as tax efficient as possible is key.

It’s also always sensible to make sure you have enough cash available in your emergency fund. Especially if you’re in or approaching retirement and need to draw on your assets to meet income needs.

Tip 3

Maximise your ISA contributions and review your pension plan.

Taking full advantage of current tax reliefs and allowances can help shelter your investments against any future changes. Regardless of the outcome of the election, changes are likely ahead.

Consulting a financial planner will help make sure you minimise any potential negative impact on you and your family.

Remember, political headlines can be distracting, but maintaining a long-term investment strategy is essential for building and securing your wealth.

If you need more detailed advice or have specific concerns about your portfolio, our team is ready to support you.

Considering financial advice? Start by booking a call with our advisory team

If you think you could benefit from getting expert financial advice from a professional, get in touch with our advisory team today. You won't get personal advice on the call, but they'll talk you through the advice service we offer, including charges and connect you with an adviser if you'd like to go ahead.

Our advisers can recommend how you can make the most of your tax allowances through financial planning. But if you need complex tax calculations, your advisor might recommend you speak to an accountant to complement their advice.

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Written by
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Paul Crossan
Financial Adviser

I joined Hargreaves Lansdown in 2011 and have over 20 years of experience in financial services. As a Chartered Financial Planner I specialises in retirement planning, wealth management and estate planning.

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Article history
Published: 25th June 2024