A Guide to Savings: What To Keep In Mind

The choice of managing one's savings from a future point of view, to have an income or just to have the possibility of making them bear fruit and therefore being able to obtain greater liquidity, is increasingly widespread among savers. In the course of this article, we will try to explain what you need to keep in mind when choosing to invest your savings.

Even if it seems like a trivial statement, in order to manage one's savings it is necessary to physically separate them from the sums immediately available and necessary for daily life. Yet many people pay their fixed income (salary, pension, rent, etc.,) into the same personal account containing their savings.

This is therefore the first of a series of mistakes that are usually made by the average saver. The risk you run into in this case is to erode your savings for any extra or unpredictable expense that may occur during each month. By using a separate account, you can always keep an eye on the monthly sum that you have chosen to set aside.

There are many ways to protect your savings and maybe give them the chance to grow over time. Before making any choice, however, savers must make a global assessment of their situation and the objectives they intend to pursue, possibly accompanied by a professional in the sector.

Savings accounts

Surely a choice widely shared by savers is not to leave the money deposited in any simple current account, but rather to deposit it in an Individual Savings Account. This choice is clearly encouraged by the Government, which has established a system of concessions up to the thresholds of total exemption from taxation.

In addition, the British government sets the maximum amount of money you can pay into an ISA each year (for 2022/2023 it is £20,000). For these and many other reasons, ISA are widely used, also given the fact that there are many different types of ISA, and each one serves diverse goals.

Direct investments

Another method, closely related to the amount of money available, is the possibility of investing directly. In fact, starting the investigation on the investment instruments available, one immediately realizes that the solutions are multiple (stocks, bonds, government bonds and derivatives) and differ in terms of risk and complexity.

Therefore, as the investment instruments are varied, the levels of risk that can be assumed vary. Always contacting specialized intermediaries always seems to be the wisest choice. Good basic information, careful analysis and an informed choice can avoid unpleasant loss of money by non-professional patrons, who improvise players in the investment market.

Real estate investments

Regardless of the fluctuations in the real estate market in recent times, investing in real estate is a choice made by many savers, who want to buy not their own home, but rather a property to make income. Think of the apartments in the university city.

This investment sector is also often the subject of government interventions, which for some time now have been trying to entice investors (including international ones) to enter the English real estate market. The peculiarities of the English real estate market - think of the absence of bureaucracy - make it very attractive for those who want to invest.

Pension investments

Another chance to increase savings is to choose to invest in pension funds. In this case it is necessary to carefully evaluate the investment line proposed by the fund and choose the one that is closest to your needs.

The choice will be influenced by your income capacity, saving capacity, available time and risk appetite. It should also be considered that pension funds are also subject to controls by sector supervisors, through an internal control system – that contributes to a consequent reduction of risks.