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5 ways that could help you keep more of your returns

Looking for ways to keep more of your returns? Here are some nifty tips that could help.
5 ways that could help you keep more of your returns
Reading time: 5 mins

If you want to make the most of your investment journey, it could be wise to start thinking about how to maximise your potential gains. Here are 5 ways that could help you keep more of your returns.

Consider investing tax-efficiently
It’s not always well-known or understood, but when you invest, you may need to pay tax on your profits. In the UK, there are two types of tax on your investments that you could be subject to: income and capital gains tax. And ultimately, these taxes could make a significant difference to how much money you get to keep at the end of your investment adventure. Luckily, there are ways to keep the taxman away from your pot and potential gains. With a Stocks and Shares ISA, for instance, you’ll be able to invest up to £20,000 per tax year (subject to change) and you won’t need to pay UK tax on any profits you make. In other words, you’ll be able to keep more of your money.

Another way to invest tax-efficiently is to put your money in a personal pension. Just like Stocks and Shares ISAs, personal pensions, also known as Self-Invested Personal Pensions (SIPPs), allow you to remove income and capital gains tax from the equation. But it doesn’t stop there! With a personal pension, you’ll receive a little boost in the form of tax relief. Indeed, every time you make a contribution, you’ll get a 25% top-up. This means that for every £1,000 investment you want to make, you’ll only need to pay in £800 as the government will add the remaining £200 – what’s not to love? One thing to note is that your annual allowance is currently set at £40,000 a year, or the totality of your earnings (if they’re lower) – this allowance is the combined contributions made by you and the government. Another thing to keep in mind is that your money will be locked away until you turn 55, so before committing, make sure you’re willing to commit long-term.

Pay attention to investment fees
Just like tax, fees could also eat into your returns, so it’s important to try and keep them to a minimum. How, you ask? Well, this will depend on your investment journey. If you’re picking your own investments, it could be a good idea to keep an eye on your trading fees. Typically, the more you buy and sell investments, the higher your trading fees will be, and the bigger their impact will be on your pot. So, if you want to keep more of your returns, try to resist the urge to buy and sell investments frequently. If you’re using an online investment platform, it could be a good idea to shop around and compare the different offers from similar services. What fees are they taking? How much are they charging? Also, don’t forget to check the rest of the package. Fees are important, but things like customer service and investment strategy, shouldn’t be overlooked.

Try to mitigate risk
If you want to maximise your returns, you’ll need to find ways to mitigate risk. There’s no denying that investing can be risky, as your capital is at risk. In other words, when you invest, you could end up with less than you originally put in. But it’s possible to manage this risk, and a good way to do just that is to spread your money across investment types and regions - this strategy is commonly known as diversification. By diversifying your portfolio, you typically decrease the odds of losing everything. Think about it. If you invest all your money in one or two companies, you could be in for a nasty shock if those companies were to struggle. However, if you’re spreading your money, poorly performing investments should be balanced out by others that are doing well.

Think about the long-term
Another way to mitigate risk and maximise returns is to commit long-term. Why? Simply because it would give your money more time to potentially grow. In fact, many studies show that the longer you invest, the more likely you are to see positive growth. People who’ve invested in the FTSE 100 (the largest 100 companies on the London Stock Exchange) for any 10-year period between 1984 and December 2019 have had an 89% chance of making a gain.1

Get help if you need to
If you want to make the most of your investment journey, it’s important to make the right investing decisions. If you’re already an expert, have plenty of time on your hands, and know enough about markets, you could invest on your own. But if you’re too busy or not confident enough to do it by yourself, there’s no shame in asking for a little help. We live in exciting times where you can become an investor in just a few taps thanks to digital investment platforms. If you want to become an investor with Wealthify, you’ll just need to choose how much to invest and the risk level that suits you. We’ll do the hard work for you, from building your Plan to adjusting it, when needed, to take advantage of the good days and make your money work harder.


1: Data from Bloomberg


The tax treatment depends on your individual circumstances and may be subject to change in the future.

Please remember the value of your investments can go down as well as up, and you could get back less than invested.


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