Avoid Rising Inflation Eroding Your Savings

Insight | by James Stirling
CB Cost of Living

If you are one of the five million British expats who have left to pursue better fortunes abroad, you have probably asked yourself how you can make the most of your hard-earned money.

Our Financial Planners help expats living and working around the world and many of us are expats ourselves. We therefore understand how hard expats work for their money, and the sacrifices they and their families make.

When it comes to investing, there are so many options and decisions to consider – even more so if you are an expat and could be moving again soon. For many people, this means they hold capital in cash as they are unable to determine the best investment product and strategy for them.

With interest rates at historic lows and inflation quickly picking up, this is a dangerous mix for people with a large proportion of their portfolio allocated to cash.


Before you start investing, it is a good idea to put some savings aside and this is something our Financial Planners would always recommend. Investments are riskier than savings accounts – but not all risk is equal. By accepting a carefully considered amount of risk, your money has more potential for growth and therefore protection from the negative effect of inflation.

It is vital therefore that you undergo a risk profiling exercise before investing to ensure that returns meet your expectations – this is something that we always do at Forth Capital.

Many people do not know where to start investing whean they live in their home country let alone our expat clients, some of whom move regularly. It is therefore vital that these clients are able to access flexible, simple products with access to wide range of investments.


For some clients, offshore bonds are a very tax efficient way of investing their capital however, many expats are unaware that there are also products called General Investment Accounts (GIAs). These allow clients all over the world to access a wide range of investments. The tax position on these investments is easier to determine with any interest, dividends and capital gains declared in the country in which you are tax resident.

Therefore, if you invest in assets which elect to pay little or no dividends and interest and live in a country with no capital gains tax (Switzerland, Singapore, Belgium, Monaco, Malaysia, New Zealand, UAE to name a few) this could be an ideal product for you. Even if you do not live in one of these countries, it continues to be a versatile product particularly if you are unsure where you will be living in a few years time.


The General Investment Account we recommend to our clients means that you are not tied in for a set period and you therefore have access to the current value of your capital at any time, without penalty. These accounts also allow us to access a wide range of investments including our Morningstar fund range which has a strong track record of performance.

At Forth Capital, we believe it is important to be upfront and transparent when discussing fees with our clients. Many international advice firms operate on a commission-based model which Forth have moved away from. You will therefore know exactly what you are signing up for and we will look to review your investments on at least an annual basis.


Within the General Investment Account, are the investments held offshore?

For the vast majority of cases, we use Novia Global’s General Investment Account. Novia Global is an international online wealth management platform and they hold their capital offshore in the Channel Islands. This can be very helpful if you are looking at cutting ties with a country from an Inheritance Tax perspective.

Which funds should I invest my capital in?

Although not guaranteed, we feel our Morningstar NextGen fund range is well placed to deliver strong returns in the current climate. Our funds are made up of a diverse range of low-cost ETFs and indices and we have been delighted with the performance seen in Q1 of this year.

What should I do if I require tax advice as an expat?

We always recommend that you speak to an accountant/tax adviser in the country in which you are tax resident if you have any tax queries. We have connections with companies all over the world so will be more than happy to introduce you to someone.


So… whether you are looking to invest some capital from your deposits, diversify your current investment or crypto portfolio or put some money away for your children, then please do get in touch and we can arrange a meeting with one of our professional advisers.

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