Paul Smith Associates
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The new £20 note could boost your family finances

The £20 is getting a fancy makeover featuring the artist JMW Turner - and one of his most famous paintings, The Fighting Termeraire.

The new polymer £20, which enters circulation on February 20th, is important because the £20 note is the most common bank note in circulation in Britain with two billion of them in in the system, double the number of £10 notes. But as well as being able to carry a work of art around in your pocket, what can you do with a humble £20 and how hard can it work for you?

Jarrovian Wealth (JW) have looked at what investing £20 a month for the past 20 years could have made you.

Chris Salacinski, Financial Planner at JW, says: “Despite a turbulent time with two stock market crashes, the tech stock bubble in 2000 and financial crash in 2008, that saw companies like SwissAir, Enron, Arthur Anderson, Lehman Brothers and Northern Rock all disappear, new firms such as Uber, AirBnb, Tesla, Facebook and Twitter have helped to offset the dips.

“Had you invested in the FTSE 100 and reinvested your dividends you would have returned circa 93.5%.”

Investing for you
If you saved £20 per month for 20 years, in say a stocks and shares ISA, invested in the FTSE 100 (which has averaged 5% per annum over the last 20 years), you would have put in £4,800 and now have more than £7,000.

Invest that £7,085 and £20 a month for the next 20 years and you could have a fund worth £21,877. A tax-free tidy sum that could boost your retirement income, fund a new car or pay for that holiday for a lifetime you've been promising yourself. *

Anyone under the age of 40 can take out a Lifetime ISA - and get a 25% boost to their saving from the Government. Putting £20 a month away for 20 years, plus £5 a month from the Government could build up to £8,853. A nice chunk towards a house deposit or some extra cash to leave invested for your retirement. **

Investing for your children
Putting £20 a month for 20 years away for your child into something a little more adventurous, achieving 8% per annum. You would have put in £4,800 and built up savings worth £9,867. Persuade the two sets of grandparents to put in £20 a month each too and that could build up to a balance of £29,601. A tax-free sum to help fund university or a deposit for their first home. *

Chris adds: “No one knows what the future of investments will look like, but interest rates look set to stay low for a number of years. The important thing will be to have a good 'balance' of investments and make sure you are well diversified to ensure that if one 'asset' falls in value, it is countered by another one you hold rising in value. Having all your eggs in one basket, e.g. property may have worked in the past, however I am not convinced it will happen going forward.”

Notes to editors
*These are example figures based on market performance over the past 20 years and do not show what investments will actually make — investments can go down in value as well as up. Figures based on an annual charge of 1.25%.

** If you need to withdraw the money for any reason other than a first home or retirement, you’ll lose the Government bonus and pay a charge of 25% of your balance.

About Jarrovian Wealth
JW was established in 2017. Our team of skilled and experienced financial planners does more than just look after the numbers for clients around pensions, investments and protection both personal and business. We get to know and understand the deeper motivations and aspirations, so we can challenge people to think bigger. While knowing they are in a safe pair of hands building up a secure financial future. We may be one of the newer players, but we are packed with experience as our clients have been trusting our experts with their financial lives for over 30 years. We don't just focus on individuals we incubate businesses too helping entrepreneurs and those up and running to get ventures off the ground, stay on track and plan the perfect exit strategy, so owners can focus on the day job of running the show. JW's headquarters are in London.

For more information, please see:
www.jarrovian.co.uk

PAUL SMITH ASSOCIATES
21st February 2020