We’re currently experiencing extremely high call volumes. We’re very sorry for any inconvenience this might cause.

If you need help with your account, please visit our Help Centre, or email us and we’ll get back to you as soon as we can. For more information and tips on managing your account online please visit www.hl.co.uk/coronavirus

We’re experiencing high call volumes, please check FAQs before calling.

Skip to main content
  • Register
  • Help
  • Contact us
  • Log out of your HL account
Investment Times

New Year's resolutions

19 December 2014 | A A A
New Year's resolutions

No recommendation

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

Surveys show that a growing number of people are making financial New Year's resolutions. The New Year can be a good prompt to review a portfolio to ensure it is on the right footing. Below three of our experts suggest some possible courses of action for 2015.

Mark Dampier, Head of Research

Make one resolution this year that will last for years to come - I believe first-class administration is the key to successfully running a portfolio. Consolidating investments through a service like our Vantage Service allows investors to see their portfolio's value and performance at a glance. They have an instant overview of their holdings and can look at each in detail. It also makes life far easier and facilitates better investment decisions.

Find out more about our Vantage Service

No recommendation

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

Diversify - In any one year it is difficult to predict how different asset classes will perform. Only rarely does the same investment top the table two years in a row. This is why a diversified portfolio makes sense - it reduces the impact of picking the wrong asset type, the wrong region, or the wrong sector.

Ruth Richards, Head of Retirement

Make the most of tax breaks and allowances. Tax eats away at the returns on savings and investments. Investments held in an ISA are free from capital gains tax and any further income tax. An ISA subscription can be made with new money or using existing investments - called a Bed & ISA. Make the most of each spouse's income tax allowance and tax bands. Married couples (or registered civil partners) could move income-producing investments into the name of the person who pays least tax to make full use of their personal allowances and basic rate tax bands, where applicable.

Find out more about how to Bed & ISA

Save for retirement - The tax benefits available from pensions make them a compelling option - for every £100 saved into a pension, the government adds £25 in tax relief, making a total of £125. Higher rate taxpayers can claim up to a further £25 in tax relief. Remember tax rules can change, and benefits depend on individual circumstances. The more an investor saves and the longer they invest for, the better their prospects are for a comfortable retirement. Time is one of the most powerful tools for growing wealth.

Consider two investors, both saving for retirement in 40 years' time. One starts saving £100 per month immediately, the other waits 20 years, but then starts saving £300 per month. If we assume the investments chosen both grow by 7% per year, which is the long term average return from the UK stock market, at retirement our first investor will have saved £48,000 and our second investor £72,000. Yet despite investing substantially less, our first investor's retirement pot would be worth £248,552, compared to our second investor's £167,575 - that's £80,977 more.

Use our pension calculator to work out how much your pension might be worth

Danny Cox, Chartered Financial Planner

Save more - The most popular financial resolution is to increase the amount saved. Significant lump sums are not necessarily needed to become a wealthy investor. A considerable nest egg could be built by investing little and often, as the following table shows.

Monthly investment
Term £25 £100 £250
5 years £1,780 £7,120 £17,779
10 years £4,276 £17,105 £42,763
20 years £12,688 £50,754 £126,884

These figures assume an annual growth rate of 7%, which is the long-term average return from the UK stock market. This is an illustration, not a projection. Inflation will affect the spending power of returns over the long term. The value of investments can fall as well as rise, so investors could suffer losses.

Our regular savings service is extremely flexible. Investments can be made from just £25 per month into funds or shares. The amount invested can be amended and can be stopped and restarted at any point.

Find out more about Regular Saving

If in doubt, take advice - Good financial advice can make a real difference, especially around significant life events such as retirement or receiving an inheritance.

To help investors decide whether financial advice is right for them and whether our services are suitable, we offer a no-obligation initial consultation to those considering transferring or investing £20,000 or more. This consultation is free. Simply call our advisory helpdesk on 0117 317 1690.

Find out more about our advisory services

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.