A mid-year review could help keep your financial goals on track

Summary: Your finances affect every aspect of your life, including your mental well-being. The start of a new tax year could be a good time to review your investments and make sure they are still right for you and your goals. Taking a fresh look can help you feel more secure and in control of your money. Here’s some food for thought to get you started.

Please see our glossary for information on the financial terms used in this article. 

Have you ‘put your eggs in different baskets’?

You may have heard the phrase ‘don’t put all your eggs in one basket’ but what does it mean in terms of investing? If your portfolio has a high percentage in shares (often called equities), you could think about branching out into other asset types like bonds. A corporate bond is a loan taken out by a company – instead of going to a bank the company gets the money from investors who buy its bonds.

Different assets behave in different ways. For example, shares can rise and fall rapidly over time – this is called volatility. The more volatile an asset, the higher the risk and equally the less volatile an asset the lower the risk. Bonds are generally less volatile than shares so investing in a mix of assets spreads the risk and boosts your potential for more steady returns. But, as with all investments, nothing is guaranteed.

Are your investments right for you right now?

Higher-risk, more volatile investments like shares can offer higher returns. And when it comes to the level of risk that’s right for you, your age and your life-stage matter.

Generally, the longer you want to invest for, the more risk you can afford to take. You might not be too worried when the value of your investments goes up and down on a daily basis if you’re not planning to access them for 30 years. But if you’re looking to take your money soon or you’re close to retirement, it might work out better if you dial down your risk levels.

If you’re not sure how much risk you’d like to take with your investments, speaking with a financial adviser can help. If you don’t already have one you can find an adviser on our Get financial advice page.

Are you paying more fees than you need to?

Fees can make a big difference to your returns over time. Imagine you invest £10,000 with a yearly return of 5%. If you paid 1.25% in fees, after 20 years you’d have £20,631. But if you paid fees of 0.5%, you’d have £24,002.

You could also save on fees by bringing your investments together in one place. Whatever ISAs (Individual Savings Accounts) or Junior ISAs you have, wherever you have them, M&G can bring them together for you. Visit our Transferring an ISA page to find out more. Please check with your existing provider if they’ll charge you any fees for transferring. While your investment is being transferred it will be out of the market and will not lose or gain in value.

Are you making the most of what you already have?

Even if you're not looking to make new contributions right now, there are still ways to get more from your existing investments. For example, if you move your M&G OEIC into The M&G ISA, you won't pay a penny in personal income tax or Capital Gains Tax (CGT) on any gains you make. It's a simple switch that lets you keep more of what your investments earn for yourself.

Visit our Switching between M&G funds and products page to learn more. Please note your investment will be out of the market between the sale of your existing fund(s) and the purchase of your new fund(s) on the following business day. HM Revenue & Customs will treat this as a new ISA investment, so it counts as part of your ISA allowance for the relevant tax year. ISA tax rules may change in the future and their tax advantages depend on your individual circumstances. 

The sale of your existing investment will count as a disposal for Capital Gains Tax (CGT) purposes. When the sale proceeds are reinvested in full, any CGT liability will have to be met from other resources.

Will you make it a regular thing?

Aim to review your finances at least once a year, focusing on what you’re invested in and whether they’re still right for you. It could set you up for many happy years to come.

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser. The views expressed in this document should not be taken as a recommendation, advice or forecast.