Lawyer Monthly Magazine - July 2019 Edition

ISAs – Where Should Lawyers Be Putting Their Money? Domonik McNair-Templeton, financial consult- ant at specialist financial mutual Wesleyan, informs us on ways in which lawyers can save, what ISAs are and why they are a good option to consider. Saving, whether it is for a deposit on a new house, your children’s education or your retirement, should still be a key part of your financial plans. You need to find the time tomake sure your money is working as hard as you are. Because of their tax efficient nature, ISAs remain a good way to save, no matter what your financial goals may be. We would often advise customers to start thinking now about how they might like to use their ISA allowance early, so you can make decisions several months ahead of next year’s deadline in April. Here are some of the key areas you should consider when deciding what to do with your savings. Cash ISAs vs Investment ISAs While there are many different forms of ISA, the most popular types – and those we’re asked most often about – are Cash ISAs and Investment (also known as Stocks and Shares) ISAs. Cash ISAs are attractive as, on top of being tax-free, you can access your money at any time. Because Cash ISAs can offer greater convenience and flexibility, they’re often better- suited to saving towards shorter- term goals, such as a holiday or a new car. Given the generous remuneration packages traditionally on offer in the legal sector, many legal professionals may be additional rate taxpayers, who pay a higher rate of tax and don’t receive a personal savings allowance. If you fall into this bracket it may be wise to consider a Cash ISA instead of an ordinary taxable account, as this will protect you from higher tax rates. Put simply, an additional-rate taxpayer with a normal savings account will only receive £55 for every £100 of interest, whereas with a Cash ISA, they will receive the full amount. If you’re looking to save for longer-term goals – such as retirement planning – you may want to invest in a Stocks and Shares ISA, which offers the possibility of better long-term returns without the volatility of investing in the stock market directly. Before deciding on whichever ISA is right for you, you should think about your investment goals, exactly how long youwant to save for and your attitude to financial risk. Remember, any investment will come with a degree of risk, and there’s always the chance that you’ll get out less than you put in. How ISAs can aid retirement planning In our experience, a lot of customers can forget about financially planning for retirement – particularly the role ISAs can play in facilitating a healthy financial future. 24 Special Feature JUL 2019 www. lawyer-monthly .com