Cash Flashcards
1
Q
Explain why you would recommend N and J invest some of their cash into equity based investments (10)
A
- interest being received is very low
- below inflation
- eroding in value in real terms
- too much in cash for their ATRs
- premium bonds do not attract interest or provide income
- it is producing an income they do not need
- excess above PSA is being taxed at 40% in janes hands
- if moved to equity they could invest for growth
- which would help increase their funds available to fund retirement
- whilst reducing the current income tax they pay
