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Stock market offers value in the long term

Despite its recent rises, Justine Roberts of Medical & Financial reckons the stock market still offers long term potential for GPs looking to invest to boost their retirement income.

Despite its recent rises, Justine Roberts of Medical & Financial reckons the stock market still offers long term potential for GPs looking to invest to boost their retirement income.



Last week we told you about the budget's new rules for taxation of pension contributions from 5th April 2011 for those earning over £150,000 and how overall it will be a very complex and far reaching change for high earning individuals.

The question many doctors are now asking is should they continue with their pension contributions or not? The short answer is yes, certainly for the time being, until these new rules come into force in 2011.

Next year it would then be prudent to review your pension contributions and the options available for tax efficient savings, for investments that are tax efficient on contributions and those that are tax effective for taking an income in retirement.

Pensions really come into their own if you get higher rate tax relief on contributions and only pay basic rate tax in retirement. If you find yourself in the situation of only being able to claim basic rate tax relief on contributions, but paying higher rate tax on pension income then investing in ISAs will be more cost effective than pension planning.

If you already maximise your ISA allowance then you should seek find out what options you have.

When considering investing in ISAs and pensions most people do so to get access to stocks and shares in a tax efficient environment. You don't always need to take risk to benefit from the tax relief as there are low risk and cash funds available.

However, for the investor who considers themselves happy to take a medium to balanced risk, and are happy to invest for the medium to long term, then stocks and shares should at least be considered and investigated for their suitability to be part of your planning and your portfolio.

The FTSE 100 has been headline news for sometime now, April has been no exception, but for better reasons. Last week it had its biggest gain for 6 years and is now 20% higher than its low of 3,512 at the beginning of March this year. We have said before that there are opportunities to be had whilst the markets are low, especially if you can invest for the longer term.

Some commentators are predicting that this rally will burn itself out in the next couple of months, and that the end of the year will be the true judge of how the market improves and its longevity.

Although the markets has rallied a little, they are still considered low and there is a way to go before they come back up to their all time peak, so if you have been considering investing then maybe now is the time to act before it rallies in earnest.

Justine Roberts, Medical & Financial Justine Roberts, Medical & Financial If you want personal finance advice...

Medical & Financial can be contacted by email at enquiries@medicalandfinancial.com

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