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Here's how to get the most out of your investments – and stay on track to meet your long-term financial goals

The new year can be the perfect time to evaluate what you’re doing with your money. 

You don’t have to make any resolutions or radical changes either – simply reflecting on what’s going well (or not so well) can help you make positive changes to your financial position, your confidence, and your future. 

Investors should be aware that, from 6 April, the rules around ISAs will change, and the thresholds for capital gains tax and dividend tax will reduce – so a bit of forward planning can go a long way if you’re looking to make the most of your allowances and your money in 2024. Here are seven tips to get you started. 

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Capital at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.

Seven investment tips for 2024

1. Set financial goals

Most of us find it easier to put money away when it is for a specific purpose – perhaps to spend on a holiday or a car. Investing towards a less defined target, such as ‘retiring early’ or ‘to help the children’, is often more difficult.

It’s worth taking a bit of time at the start of the year to map out why you’re investing, and how you’d like to reach your target. Those who set goals with their money are more successful when it comes to both saving and investing.

Remember, Nutmeg’s experts are on hand to offer financial guidance, and you can book a free call today to help you set up your investments to achieve your financial goals. We can also help you to understand if our paid for, restricted financial planning service can help create a plan that’s right for you.

Read more: Three reasons to consider financial advice

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2. Get your finances in order

It can be hard to plan to put money away if you don't know how much you have – and how much you're spending.

Making a budget and a financial planning checklist will help you see where your money is going and ensure your financial goals are realistic.

Technology can make this easier. For example, your banking app might allow you to view your other financial products or outgoings such as credit cards, mortgages or investments, alongside your current account and savings pots. This will give you a fuller picture of your budget in one place.

If you prefer, you can use your bank statements and credit card bills and create a spreadsheet to see what is coming in and going out. The rise in popularity of budgeting in recent years has also led to a rise in ready-made spreadsheets and paper forms you can buy. At Chase, the built in budgeting tool can help you to better track and manage your monthly spending.

You may find that you are spending money you don’t need on subscriptions, memberships or unnecessary shopping. A financial ‘detox’, where you cut out surplus spending, could help you find the cash to fund long-term investments.

Read more: The accounts you need in your financial life

3. Use tax free allowances

The government rarely gives anything away for nothing, but the ability to invest money into a stocks and shares ISA or pension without paying tax on growth or returns – and in some cases even getting back the tax you’ve already paid – is worth considering. 

In the case of pension contributions, the government will add back 20% relief automatically if you are a basic-rate taxpayer. If you pay higher-rate tax you can claim 40% relief through your tax return. Additional-rate taxpayers can claim 45%.

There are other instances where tax should be considered. For example, if you are looking to sell something for a profit, such as a property, a family heirloom or a business asset, you may have to pay Capital Gains Tax after your annual allowance is factored in.

When the 2024/25 tax year begins on 6 April, the Capital Gains tax-free allowance will change from £6,000 to £3,000, a change which is expected to affect around half a million people in the UK, making it all the more important to shelter your money in ISAs and pensions when and where you can.

If you’re unsure of the allowances you have available or how best to maximise these, a free call with a member of our wealth services team could help.

Read more: How the Capital Gains Tax changes will affect you

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4. Consider consolidating your pension pots

With most of us having several jobs during our careers, the chances are that we will retire with pensions in several different places.

These can be hard to keep track of and might make it more difficult to work out how much money you might have in retirement. You might want to consider consolidating them by transferring to a single provider, so you can see them all in one place. In some cases, this may be cheaper in terms of what you are charged.

Before you transfer pensions it is vital to check they do not have any guarantees attached to them. Some pension types might guarantee a particular annuity rate or level of income and such guarantees can be valuable. You should also check whether any charges are payable by your provider if you transfer. If you’re unsure, we’re on hand to help.

Read more: Your six-point plan to retirement bliss

5. Embrace compounding

Compounding means that when you earn interest or returns on your assets, these returns then begin to accrue gains for themselves, creating a snowball effect that increases your wealth over time.

This empowers investors, because starting as early as possible for a long-term goal can have a significant impact further down the line. So even if times are tough, remember compounding, and if your financial circumstances allow, try to put away something for the future, so it can grow over time.

Nutmeg’s compound calculator can help you to see the impact of compounding on your investments.

Read more: The power of compound returns

6. Don’t panic: investing is for the long term

Market volatility is a natural part of investing. But that doesn’t make it any easier to manage! 

When markets are volatile, it’s important for investors to keep the long-term view in mind – or at least remind themselves why they started, or the goal they're aiming for. If you don’t need the money in the short term, and your goals and timeframe haven’t changed, then try to resist the temptation to sell investments on if the market is low – you will lock in losses that could be recovered later. Instead, focus on your long-term goals and how you will meet them.

Monthly investing can help smooth out performance, as you end up investing throughout market ups and downs. This concept of ‘drip feeding’ into your investments is known as pound cost averaging.

Read more: The four rules of investing everyone can rely on

7. Diversify your investments

The saying ‘don’t put all of your eggs in one basket’ has stood the test of time for a reason. Spreading your money across different investments can make for a less bumpy ride, because different asset classes have different return profiles: for example, equities can be volatile, while bonds tend to be more consistent. Having a blend of the two can smoothen out volatility or sharp changes in the level of your returns. 

You can diversify your investments by having a mix of assets, including some money in cash for emergencies, as well as investments for the long term. You can also diversify within those assets via strategic asset allocation. 

Asset allocation means ensuring your investments include a blend of asset classes, regions, styles and more. That way if one company fails or there are problems in a certain geography, your portfolio can be cushioned from some of the downside.

At Nutmeg, our portfolios are built, monitored and managed by our expert investment team, globally diversified and risk-adjusted according to your needs. 

Read more: What is diversification?

How to put these tips into practice

Perhaps you're feeling inspired and ready to start mapping out where you want investing to take you next year – or maybe you're feeling unsure of where to start. Our life moments guide may be useful in determining how you may want to invest across the decades. Want to understand how much money you need, or how much you can afford to invest? Our handy toolbox of calculators can help you bring your visions to life and prepare you to invest in 2024 and beyond. 

You can also book a free call to speak to a member of Nutmeg’s team of experts if you have any questions about making the most of your money. We're on hand if you need us. 

Risk warning

As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. Past performance is not a reliable indicator of future performance. Tax treatment depends on your individual circumstances and may be subject to change in the future. Please note that during any transfer, your investments will be out of the market. If you are unsure if investing is right for you, please seek financial advice.