How should you design a financial strategy?

Start by understanding your current financial situation, goals and objectives. Think about the future and what retirement means to you. What income will you need? What size of property(ies) would you like? This is the time to dream a little and free yourself of convention. This helps define your future income and capital requirements. However, things can change, and income and debt need to be protected by insurance. Vital components in investing include understanding your attitude to risk and capacity for loss. Affordability is always a prime driver, as well as objectively reviewing and refining your strategy.

What risks do you need to consider?

Consider any likely macro-economic events, ensure the portfolio is well diversified through different asset classes, geographical areas and investment structures. Inflation is a major risk and will erode the real returns on investing. Other risks include: ease of access; taxation changes; currency rate changes; and interest rate changes.

You will need to decide whether to invest actively via a fund manager or passively through a tracker fund. Active funds are more expensive but often only marginally so, yet many have vastly out-performed tracker funds during the COVID crisis.

What financial structures should I invest in?

Pensions offer significant tax advantages including tax relief at your highest marginal rate, tax free growth and the ability to pass money free of inheritance tax through the generations. However, allowances are reducing and the lifetime allowance can be problematic – not just to the higher earners.

ISAs allow you to invest in a wide range of assets, benefit from tax-free growth and tax-free pay outs and offer easy access. Junior ISAs are a great way of funding deposits for children.

The gains on general investment accounts can be offset against one’s capital gains tax allowance (currently £12,300) each year. You also have an annual dividend allowance and savings allowance. However, there is a real threat that CGT will increase nearer to the Income Tax rates.

Offshore investment bonds are often overlooked. These are another tax-efficient way of saving for the medium to long term. Operated by major insurance companies, they offer compound growth, are flexible in terms of pay outs and work extremely well in combination with trusts to provide a very efficient estate planning tool.

Venture capital trusts and enterprise investment schemes offer tax advantages to high earners, including tax relief of 30% to 50% when investing, and tax-free pay outs if kept for a holding period of three years to five years respectively. These are proving to be popular for higher earners whose ability to fund pensions is being reduced.

Understanding your underlying assets

Emergency funds should be held in cash. Equally, it makes sense to offset high interest mortgages, reserve cash for short-term purchases or use it to meet the next tax bill. However, cash deposits will quickly be eroded by inflation. Consider whether investing is likely to beat the returns offered on deposit accounts. That is certainly likely to be so in the long term.

The death of the high street and vacating of office space is likely to have a real impact upon commercial property values and rentals. Such spaces cannot remain fallow and could be increasingly used for residential purposes. This increased supply could, in turn, impact upon residential property prices. The buy-to-let market is an easy target for central government. Increases in buy-to-let tax and additional taxes are a real threat, not to mention that it is illiquid, expensive to maintain, suffers from void periods and is stressful to manage.

Assets such as wine, whisky, antique books, stamps, watches and cars are classified as wasting assets by HMRC and as such are non CGTable (ie unlikely to have a value after 50 years). However, there are anomalies and these outliers can provide an attractive investment. However, one requires specialist knowledge, they typically have a high entry cost, cost a lot to maintain/store, values are volatile and need insuring. These aspects can often outweigh the increase in values.

Of the above, whisky has performed extremely well. However, this performance pales into insignificance when compared to Bitcoin, which, at the time of writing this article, has grown by a staggering 32,682% over 10 years! But beware – crypto currency is extremely volatile, unregulated, of limited use and often supports illegal activity. And if you lose your private key, you also lose all your funds! 

Fleet Street Wealth is a trading style of Fleet Street Financial which is authorised and regulated by the Financial Conduct Authority.

Fleet Street Wealth is a Chartered, independent, fee-based financial advisory and wealth management practice based in Temple. We provide advice on areas such as mortgages, life assurances, pensions, ISAs, onshore and offshore investments, VCTs, EIS and private medical cover.

For more information tel: 020 7353 6373; email:; visit: