Investments for a UK director — the basics, honestly
This article is not regulated financial advice. We are not authorised to give personal recommendations; we lend money to limited companies. What follows is general information of the kind a friend who happens to know the subject would tell you over a coffee. For personal investment advice please use a FCA-authorised independent financial adviser — the FCA has a free register to confirm anyone is genuinely authorised.
First, fix the basics
- An emergency fund. 3-6 months of household costs in an easy-access savings account before any investing.
- Expensive debt cleared. Anything over 8% APR — credit cards, payday loans — beats most investment returns net of tax.
- Pension first. Employer contributions are free money. As a director, even a SIPP with basic-rate relief beats most other instruments on tax efficiency.
Then think about three pots
A useful frame for personal investment is three pots: short term (cash savings, premium bonds — protected, liquid, 0% to 5% returns), medium term (Stocks & Shares ISA — tax-free wrapper, £20,000 per year allowance, 5-10 year horizon), and long term (pension and / or general investment account — 10+ year horizon, equity-heavy).
Why diversified, low-cost funds beat stock picking
The evidence is overwhelming and goes back fifty years. Most actively-managed funds underperform a simple low-cost global index tracker after fees over any decade. The two cost numbers to look at on a fund factsheet are the ongoing charges figure (OCF) — anything over 0.50% should make you ask why — and the platform fee — anything over 0.45% on a £50k portfolio is excessive in 2026.
The wrappers, in order of usefulness
- Workplace pension — if you have one, max the employer match.
- SIPP (Self-Invested Personal Pension) — for directors, the company can pay in as an allowable expense, reducing corporation tax.
- Stocks & Shares ISA — £20,000 per year, tax-free growth and withdrawals.
- General Investment Account — for surplus beyond ISA/SIPP allowances; uses your dividend and CGT allowances.
Red flags
- Anything promising guaranteed double-digit returns. The risk-free rate in 2026 is about 4-5%; everything above that involves real risk.
- Unregulated firms — check the FCA register. If they are not on it, walk away.
- Crypto pitched as investment rather than speculation. The FCA does not protect crypto holdings; treat anything in it as money you can afford to lose.
- “Property crowdfunding” platforms that lend to a single project; if it goes wrong your capital is at risk and there is no FSCS protection.
The role of your accountant
A good chartered accountant will help you think about director’s pension contributions, salary-versus-dividend mix and the use of an investment company for surplus profits. A regulated IFA will help you build the personal portfolio. The two roles overlap but are separately regulated — make sure both are properly qualified.
