The information provided in this article was accurate at the time of publishing and should be read in the context of the date it was published. Views in this article are those of the author alone and do not necessarily represent the view of Scottish Friendly.

Making an Investment Plan

An investment plan is quite different to a savings plan. Investments are normally considered as a commitment for the medium to long term – so at least 5 to 10 years. Here are some key points you may want to consider if you are thinking of making an investment plan.

1. Decide what are you investing for

Do you have a long term investment goal, or a large expense looming in the future? For example, if you are a doting parent the expense may be a child’s wedding, funding for further education or helping with a deposit for a first home. Or you might be putting something away for retirement – to top up your pension. You may even have a big holiday in mind.

Whatever you are investing towards, it might be useful to set up a plan for each of your goals so you can monitor how they are doing. Scottish Friendly could help you do just that. With our Investment ISA you can  organise your money by creating different pots or policies within it and name them for each of your saving and investment goals.

2. Decide how much you can afford to invest – it doesn’t have to be a lot

You don’t need a king’s ransom to start an investment plan. Investing in the stock market is no longer the preserve of the wealthy and well advised – with Scottish Friendly you can start from as little as £10 per month. Or a lump sum investment from only £100. Your full ISA allowance for 2015/16 is £15,240. So you can have an Investment ISA (also known as  Stocks & Shares ISA) even if you already have a Cash ISA. As long as you remain within your annual ISA allowance.

Bear in mind that the value of your investment can go down as well as up, so you could get back less than you have paid in.

One of the main benefits of ISAs is that they are tax-free, which means the policy grows free of income and capital gains tax (other than tax that’s already paid, i.e. on dividends from UK shares). Tax treatment depends on individual circumstances. Tax law may change in the future.

Find out more about Investment ISAs>

 3. Consider the level of risk you are comfortable with

My Choice (ISA) offers a range of 8 funds, each with different risk and reward profiles. Examples include the With-Profits fund, UK Government Bond fund, UK Tracker fund and Actively managed fund, so it could be possible with a Scottish Friendly ISA to pick the level of risk to suit you. Read more on funds available here.

4. Project ahead and think about how much your plan could return

Consider what you would like to achieve in terms of growth. Using the projection tool on the My Choice (ISA) page (click the tab ‘How your money could grow’) you can see what you could get back and how that meets with your future plans. With a Scottish Friendly ISA, you can add escalation to your annual premiums – this means incrementally increasing your payments year on year. You can select 2.5%, 5% or 10% increases – or not increase at all if this doesn’t suit your plan.

5. Track the performance of your plan

After opening a Scottish Friendly ISA, you will be eligible to sign up for My Plans – our own digital banking zone. With a My Plans account, you can log in 24 hours a day, 7 days a week and track the performance of your plan. You can manage your plan from here – add additional policies to your ISA, switch funds, increase or decrease premiums and adjust escalation rates. All provided you remain within your annual ISA allowance.

These are just 5 key points that you may want to consider as part of a wider savings and investment plan. We hope you have found it useful.

Find out more about Investment ISAs>

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting Advisers may charge for providing such advice and should confirm any cost beforehand.