How to get better returns on your money

How would you like to answer a question that could earn you more money?

It's not a quiz, not a trick and you don't have to pay to have a go.

There's no wrong or right answer.

You just have to be honest.

Are you ready?

Right, here comes THE question: What are you saving your money for?

After a bit of brow-furrowing most of us will say: "I'm saving for a rainy day", or "I'm saving for my retirement" or "I want to pass something on to my children".

All those answers are perfectly fine. You're planning ahead, protecting your future, trying to do a good thing for your family - which is good.

Yet here's a thing.

You might be thinking long-term, but you're probably saving short-term - which is not so good.

Thinking long-term and saving short-term is one of the most common mistakes we make with our money, according to financial planning expert Barrie Storm of Towergate Financial. Towergate Financial are a partner agency of The Nottingham which gives our customers impartial advice on everything from savings to investments and retirement planning. They will build a plan to suit you, which you won’t have to pay a penny for unless you decide to go ahead with the Towergate advisers recommendations.

"The most common thing we get asked by customers is how they can get better returns on their money in a low-interest environment," says Barrie.

The first thing a customer needs to consider is how long that money is "going to be sitting around before it is spent". The answer often surprises them. They are saving for things that might be five, 10, 15 or even 20 years in the future. Yet most of their savings are sitting in lower yielding instant-access accounts.

A savvy saver has a good mix of investments that will cover day-to-day needs and emergencies - AND longer-term, higher-earning products that will provide them with a retirement nest-egg or a legacy to pass on to their children.

Lots of stock market-related investment products can give customers those longer-term rewards.

"People often haven't considered them", says Barrie, "because they think their money is more vulnerable or they will be hit by prohibitively high penalty charges if they need to cash in their investment early".

That is not true. Cashing in an investment ahead of time will generally bring lower rewards, but high penalty charges are now a thing of the past. The stock market is subject to fluctuations but figures show it is resilient and has demonstrably given investors good value over the longer term, says Barrie.

"The biggest risk to your money is inflation," says Barrie. "If your money is sitting around, earning very little, it is losing its value. You are not protecting your money for your retirement. The legacy you want to pass on may be depreciating every day in real terms."

Barrie's advice is this: Don't restrict your decisions.

Sit down with a financial planning expert and work out what you want to achieve. Let them help you to find a mix of savings and investment products that will give you short and longer-term security.

A financial adviser will be happy to talk to you if this is of interest. Call the branch nearest to you and book an appointment today.
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