Best Income for Expats - Update Blacktower Financial Management (International) Limited

Here is a brief resume of what is exactly available in the market place for investors and the rates you can expect to receive. Getting the best income possible from your investments is crucial in the current economic climate.

Deposit Accounts – If you are lucky enough to be an existing customer or have an address in the UK you can have a bank account that offers interest. Currently the best providers are Holmesdale Building Society which is offering a whopping 2.00% on between £10 and £50,000. This is far away out in front of all the providers but take note it is a VARIABLE rate so they could reduce the interest at any time, this is for existing customers only so unless you already have an account with them you cannot get this rate. The best of the rest now is the Loughborough Building Society offering 1.3% on up to £50,000 – again this is a variable rate. If you want a fixed return and can forgo access National Savings Guaranteed Growth Bond is paying 1.95% for 3 years. The providers are typically similar and can be compared to suit your needs, I got this information from Comparethemarket .com.

If you are limited to a Spanish provider now you will not be even able to get 1% now unless you are willing to tie your money up for 18 months. I saw one client recently who has just had their interest reduced after the 18-month period at 0.5% to 0.01%. Yes 0.01% which means you will get the princely sum of €1 interest after one year if you invest €10,000.

In the current climate deposit accounts, should be used for emergency money only with the rates offered often do not even match inflation. One way to combat inflation is to put money away for some sort of term. I would be wary of fixing for a long term too as there is a possibility that interest rates could soon rise and you might find yourself locked into a poor rate.

Spanish Compliant Bonds – Rates vary and depend on the size of investment. Prudential offer a Cautious Fund that is currently paying growth rates of 4.8% for Investments in Euros and 5.5% for investments in Sterling. This type of investment is great for people wanting medium to long term income or growth. 5% of capital is allowed to be withdrawn each year penalty free. These offer very good tax benefits but are only available if you are a Spanish Fiscal resident.

Shares – These are a bit of a gamble but do offer an attractive longer term approach. Dividends are paid to give you income (which in the FTSE 100 for example can get you an average of 2.5%). Growth on your investment can also be provided by the performance of the company of the share you invest in. If you are not an expert, it is often best to use a Fund that provides a basket of shares and they have experts to do the picking for you.

At Blacktower we have partnered up with Quilter Cheviot in London to offer the Nexus Dynamic Portfolio. 2016 saw growth on this fund of over 14% and 2017 saw growth over 10%. There are other investment vehicles such as Annuities, Structured notes, unit-linked or unit trust funds but then we are going up the risk ladder and usually a fully Qualified Financial Adviser will be involved. Remember everything is ok in moderation and putting all your eggs in one basket can lead to trouble.

In today’s financial climate it is essential you do everything you can to make sure your money is safe and secure and what you want to transpire in the future has the best chance of happening.

The above information was correct at the time of preparation and does not constitute investment advice and you should seek advice from a professional adviser before embarking on any financial planning activity. Blacktower Financial Management (International) Limited is licensed by the Gibraltar Financial Services Commission. Licence 00805B. Blacktower Financial Management Limited is authorised and regulated by the Financial Conduct Authority in the UK.

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