Safer hunting for higher income

Informed Choice chartered financial planner Martin Bamford was quoted in Investors Chronicle this morning, in an article looking at safer options for income investors.

Commenting on the options for savers who want a higher return, Martin said:

“Savers who are not prepared to take risks with their money should still hold cash,”

“They need to shop around to secure the most competitive rates, ideally not fixing any returns for longer than a year, in case interest rates start to rise. They should also look for tax efficiency where possible, using their cash individual savings account (Isa) allowances each tax year, in order to keep pace with price inflation.”

We always urge savers to be very careful before moving away from cash to investment options, such as fixed interest securities, in a search for higher income.

Whilst fixed interest securities including Gilts and Corporate Bonds can offer the potential for higher income yields, they do expose savers to investment risk and the value of capital can fall as well as rise.

Photo credit: Flickr/RenoTahoe