Investments

Examines various tax management approaches realting to private equity investing.

If you have cash ISAs from previous tax years then the chances are you're earning next to nothing in interest. Moneywise TV explains why it pays to transfer your cash ISAs ­ and shows you the best way to do this.

Knowing your attitude to risk is key to making the right investment choice. Moneywise TV speaks to Darius McDermott, managing director of Chelsea Financial Services, to help investors understand what their attitude to investment risk really is.

In this episode of Moneywise TV, Hannah Ricci explains that by not using your ISA allowance before the April deadline, you'll be handing a chunk of your cash to the taxman.

A pooled (or collective) investment is where a group of people put their money into a fund which is then invested in one or more asset classes by a fund manager. There are a number of benefits to pooled investments including:

These are investments which include an element of life cover. Essentially you pay a lump sum to a life assurance company which is then invested for you until you cash it in or until you die. They do not run for a specific term but should still be thought of as a medium to long term investment as they often require you to tie up your money for at least five years and there will usually be a charge if you cash in the bond during the that period.

Investment funds, sometimes called collective investment schemes, are pooled investments run by fund management companies. Their objective is to grow your money pot in the medium to long, generate an income, or some combination of the two. You purchase ‘units’ or shares in the fund, which are then invested on your behalf according to the fund’s rules and whichever investment objectives are being pursued.

Endowments combine investment with life cover. They generally have a fixed term and usually require you to pay a regular fixed premium, some of which is used to buy life cover while the remainder is invested. At the end of the term you should receive the proceeds of the investment, and if the policy ran for at least ten years its value will be paid to you as a lump sum, generally without any further tax liability. If you die before the end of the term the policy pays out a death benefit whose amount will depend upon the premium you pay, your age and sex, and the length of the policy.

If you have decided to send your children to a fee paying school, or think you will want to help them with the cost of university education, then it is worth thinking carefully about how to best fund such fees. Eighty percent of parents pay their children’s school fees directly from income, despite the fact that there may be more efficient options available.