October 13, 2024
Cash Flow Planning: How to Draw From Your Portfolio
Table of contents
Key Features to Look for in an
Investment App for Beginners in the UK
Investment App for Beginners in the UK
Introduction
Withdrawing money from your portfolio in the most effective way
Introduction: Understanding Cash Flow Planning
One of the most important parts of financial planning is good cash flow planning. Do I have enough income to cover the expenses I am going to incur over the coming weeks and months?
Budgeting is a topic we've covered in some depth, but it still leaves the question: where is this money coming from? The answer to that is one that we can't give you. In most cases it will come from income from your day-to-day job, but you may also have to draw down on your portfolio in order to cover this. When might this happen?
In-between jobs
When you aren't currently employed, you obviously won't have a monthly income coming in from your employer. You will have to either live on savings, investment income or draw down from your portfolio, and will want to consider how best to do this.
When it is tax efficient
In some cases, it will be more tax-efficient to draw down income from your investment portfolio than to take income from a job. Why is this? Well, once you've used up your personal allowance, capital gains and dividend income are taxed at a lower rate than income. So it will quickly become more tax efficient to spend investment income.
Of course, in the early stages of your career while you are in the wealth accumulation phase, you will want to focus on increasing income rather than taking tax-efficient withdrawals, so this may not be of interest. However, it raises another important case.
Retirement
It is likely that your government pension won't be enough to cover all of your expenses in retirement, at least if you are hoping to have a comfortable retirement and not make any compromises in your standard of living. You will therefore want to supplement the state pension with additional income, and since you will no longer be working, this will have to come from investments or savings.
This might be in a tax-advantaged investment account or even better, a personal pension.
You might hope that by the time this comes around, you will have accrued enough savings to last you until death, and there are various ways you can do this. Standard financial planning advice is to recommend the 4% rule, where you can safely withdraw 4% of your portfolio per year without running down the principal.
So you could take £40k/year gross from a £1m pot in perpetuity. This is what's known as the Safe Withdrawal Rate (SFR)
Taking the Income: Different Withdrawal Methods Explained
So now you know which circumstances to take it, you need to think about how exactly you'll take it out. Which sounds straightforward right? Not exactly - you have a few options here.
Pension Lump Sum
You are able to take the first 25% of your pension pot as a tax free lump sum on retirement, meaning that the first part of your retirement will be subsidised without paying tax. You should look to take advantage of this by staggering the first chunk of your expenses in this first period.
Pension Income
The remainder of your pension (or indeed the whole pot if it is a final salary / defined benefit scheme) is paid out to you as income, on which you will pay income tax at your appropriate rate.
This will likely be lower than your tax band from your working life, but still worth bearing in mind that some tax planning may be necessary.
This is particularly relevant to those who are in the 100k tax trap.
Realising Capital Gains
You are able to sell off assets accrued during your life, and will have to pay the tax on the gain as applicable. Capital gains tax is payable at 10% or 18% if you're a basic rate taxpayer (depending on the asset), and at 20% or 24% if you're a higher or additional rate taxpayer.
This is naturally lower than income tax rates, although potentially subject to change in October's budget. This is a point of interest, and means that you can use capital gains and pension income in conjunction to cover your living expenses.
You should also take care to sell down assets in proportion to your target diversification - selling down too much of one asset could adversely affect your asset allocation.
Dividends & Income
Finally, you can also use dividends from stocks, or income from investments (eg rental property). The dividend tax rate is taxed lower than income, but all investment income will be taxed at your marginal income tax rate - so be aware this will be treated the same as your actual or pension income.
Factors Influencing Your Withdrawal Rate
The main factor that should influence your withdrawal rate is how much you actually need! You should be aiming to balance how much you need, and how much you are able to withdraw sustainably to make your pot last the course of your lifetime.
This is an art and certainly not a science, so there isn't a right way. But by assuming conservative growth rates and predicting the tax you'll pay at each stage, you will be well prepared to deal with the expenses you'll face in the years coming.
Regular Review and Reassessment of Your Strategy
Of course, the other important part of this process is a constant review as things change. You should aim to do this at least quarterly, and work out whether your forecasts, withdrawal rates and tax expectations are still in line.
This is particularly important for things like taxes which are subject to change, and often do change with new governments, politicians and macroeconomic environments. Note that they usually go up rather than down!
Adjusting Your Plan for Market Volatility
You should have accounted for this already, but it's important to make sure that you stress test your plan and account for being able to weather sustained periods of economic downturn. Look at some of the worst periods in economic history, and overlay them onto your plan.
Does it still hold up if the stock market experiences little, no, or negative growth for 3,5 or 10 years? If not, how much. do you need to change it?
The last thing you want to do is be at the whim of the economy and 'bet your retirement'.
Tools and Resources for Effective Cash Flow Planning
There are a number of different tools that people use for personal cash flow planning. Some, also often used by advisers, include things like Voyant and Timeline. Others, built specifically for consumers include Projection Lab, and indeed Strabo's own cash flow planning tool.
You can drag sliders along the cash flow forecasting tool to display exactly how much cash might be available to you at different ages, based on various growth forecasts for your assets.
Conclusion: Building a Resilient Financial Future
As by now you've realised, effective cash flow planning is one of the most important parts of financial planning. The most important thing about this process is making sure that you have enough to sustain your lifestyle after all taxes have been paid. Which is a very important distinction to make.
You need to use your two levers wisely - which assets, if any, to take cash from. Then also how to combine these for an effective tax strategy.
As always, when in any doubt you should contact a financial adviser, which you can also do through the Strabo dashboard. This is particularly relevant if you're an expat or not a UK resident - more details here.
Why Use Investing Apps in the UK
The UK has seen a boom in investing apps in recent years, which offer beginner investors an easy to use and accessible option to get into the market.
Investing is now simpler than ever thanks to these applications, which get rid of the need for pricy brokers or complicated procedures. Investing apps like Trading 212, Freetrade, and Revolut make it possible for young and beginner investors to take control of their investments with their user friendly interfaces, built in educational tools and minimal or no costs.
As the need for low cost investing options and financial independence continues to grow, the UK is expected to utilise mobile investing tools even more in 2025. More people in the UK are using apps to manage their money as a result of its adaptability, simplicity of use, and the growing trend towards digital financial solutions and increased awareness of personal financial planning, which makes investing apps an effective tool for beginner investors.
Investing is now simpler than ever thanks to these applications, which get rid of the need for pricy brokers or complicated procedures. Investing apps like Trading 212, Freetrade, and Revolut make it possible for young and beginner investors to take control of their investments with their user friendly interfaces, built in educational tools and minimal or no costs.
As the need for low cost investing options and financial independence continues to grow, the UK is expected to utilise mobile investing tools even more in 2025. More people in the UK are using apps to manage their money as a result of its adaptability, simplicity of use, and the growing trend towards digital financial solutions and increased awareness of personal financial planning, which makes investing apps an effective tool for beginner investors.
Benefits of Using Investing Apps for Beginners
There are a number of advantages to using investing apps for beginners, particularly for those who are just getting started. Here are a few main benefits:
- Accessibility - By providing a straightforward, mobile friendly platform that is available at anytime and from any location, investing apps have completely changed how individuals invest. You no longer have to spend hours learning complicated systems or setting up sessions with financial experts. Beginners can begin investing directly from their smartphones with a few taps. Anyone, regardless of their schedule or location, can participate in investing without any obstacles thanks to this immediate access.
- Low cost - The affordability of investment apps is one of their most notable benefits. The high commissions and administration costs associated with traditional broking services make it challenging for those starting out to invest small amounts of money. On the other hand, a lot of investment apps provide cheap fees or commission free trading, which makes them perfect for beginners. This enables beginners to invest without fear of losing a significant amount of their profits to fees, allowing them to give more money to the market.
- Adaptability - Traditional investment strategies are not as flexible as investing apps. Beginners can more easily dabble without making a significant upfront payment because many investment platforms enable users to invest in a variety of assets, stocks and shares, exchange traded funds (ETFs), and specialised investment options, allowing beginners in the UK to diversify their investment portfolios right away. Furthermore, everyday investors may manage their investments on their own terms and are not restricted to a 9 to 5 schedule thanks to the option to trade at any time and from any location.
Investment apps are a great place for beginner investors to start because they combine low-cost solutions, user friendliness, and convenience to help gradually increase wealth.
Manage your wealth like never before
Get started
Key Features to Look for in an Investment App for Beginners in the UK
It's crucial to search for features that can features that can facilitate your learning and make investing simple and accessible when selecting an investment app as a beginner. Here are some essential features to look out for:
- East to use interface
The design of the app should be simple and intuitive. You will find it easier to comprehend and utilise the platform without feeling overwhelmed if it has a straightforward and uncomplicated layout. - Educational Resources
The best investment apps include educational materials such as FAQs, videos, tutorials, and articles. Beginner investors can use as a guide to understand important investment strategies and make wise choices. - Platform fees
A lot of investment apps charge management fees and trading fees. To protect your investment gains, it's crucial for beginners to select an investment app with little to no costs. The best investment apps waive management fees or provide zero commission trading. - Low minimum investment
For beginners who might not have a large initial investment, apps that let you start investing with small amounts of money are excellent. Also look for apps that sell fractional shares, so you can invest in pricey stocks without having to purchase the entire share. - Portfolio diversification tools
Seek for investment apps that provide a variety of investment options, including mutual funds, index funds, and exchange traded funds (ETFs). Even with little money you can create a diversified portfolio by making a fractional investment in individual stocks. - Robo-Advisor Features
Some investment apps include robo-advisors which automatically manage your investment portfolio according to your goals and risk tolerance. For those whose may not feel comfortable choosing their own investments, this is a fantastic benefit. - Security features
It is important to ensure that the app has strong security features like encryption, two-factor authentication, and safe account recovery methods to protect personal data and information. - Current market data
The best investment apps have real time market data, charts and stock market performance metrics which are essential for beginners who wish to remain informed and make wise judgements. - Type of investment accounts
There are many types of investment accounts available, such as investment accounts for minors, individual retirement accounts and individual taxable accounts. You should choose an investment app that provides you with a range of account options that can help meet your financial objectives.
Further reading
Investing
May 30, 2025
What Happens When You Short a Stock and How Can You Do It?
This is the summary of the blog post on shorting a stock
Read article
Company Updates
May 16, 2022
Why We're Crowdfunding
Read more about our decision to launch a Crowdfund with Seedrs
Read article
Investing
May 2, 2023
What is the Best Crypto Portfolio Tracker
Discover how to use Strabo and other tools to track your crypto portfolio across platforms
Read article
Investing
November 19, 2024
Why is there a Crypto Surge and What Does it Mean for my Portfolio
With crypto prices rising across the board, let's take a look at what this means for your portfolio
Read article
Investing
February 14, 2022
Why a Bear Market Might be a Good Thing for Crypto Investors
A downtrend in crypto markets could prove to be a good thing in the long term. Here's why
Read article
Investing
July 14, 2022
What is Responsible Investing and Why It Matters: ESG Funds
A brief introduction to impact investing for consumers
Read article
Saving
December 3, 2022
Why Energy Prices are Rising: A Brief Explanation
A brief look into the increase in energy prices in the UK
Read article
Saving
June 22, 2022
Why is Petrol so Expensive in the UK in 2022?
It is now more expensive than ever to fill up your car. But why?
Read article
Company Updates
March 5, 2024
What we learnt from launching on Product Hunt for the first time
Launching Strabo on Product Hunt
Read article
Investing
June 14, 2023
Where Should You be Buying Stocks: The UK's Top Brokerage Accounts
Find out which is the best brokerage account to open in the UK this year
Read article
Investing
September 9, 2024
What Metrics Should I be Tracking in my Investment Portfolio
Find out what you should be looking for when tracking your portfolio
Read article
Saving
August 28, 2024
What is the 100k Tax Trap and How Can You Avoid It
A dramatic effective tax increase awaits. Find out what to do when it hits
Read article
Saving
December 3, 2022
What is Inflation, and Why Does it Matter?
Discover how rising prices come about and what they mean for you
Read article
Saving
June 29, 2024
Prepare Yourself for Unexpected Expenses: How to Plan for the Future
Get ahead of any large upcoming costs before they affect you
Read article
Investing
August 17, 2022
Modern Portfolio Theory: Real-World Applications
Discover how MPT can be applied to your investments
Read article
Saving
February 21, 2025
Top 10 Best Apps for Saving Money UK: Boost Your Savings Effortlessly
Find out which ones you should download today
Read article
Saving
January 31, 2022
The Top 5 Bank Accounts for Digital Nomads
Which should you use when moving abroad
Read article
Guides
March 2, 2024
The Top 5 Financial Planning Tools Used by Advisors
Which software can help you improve your clients' experience
Read article
Guides
May 11, 2023
The Property Investment Guide
Learn about getting started with property investing with Strabo
Read article
Investing
June 21, 2024
The Top 10 Financial Trends to Watch in 2024
Here's what you should be paying attention to for the upcoming year
Read article
Financial Independence
December 8, 2022
The Pros and Cons of an Increased Workplace Pension Contribution
Should you increase your pension contributions or invest elsewhere?
Read article
Investing
September 26, 2024
The Future of Finance: 10 Key Fintech Trends Shaping 2024 and 2025
Here's what to pay attention to in fintech in the coming years
Read article
Guides
March 14, 2023
The Financial Planning Guide
Your detailed guide to personal financial planning
Read article
Saving
April 7, 2023
The ISA: Part 1 - What is it, and How Should I Be Using It?
What are the different types of ISA and how can you use them as an effective tool?
Read article
Investing
December 15, 2022
Fear and Greed Index: What It Is and Its Market Impact
Measuring how much fear and greed is affecting market prices
Read article
Saving
December 3, 2022
Best Savings Account for International Students Abroad
A resource to compare savings accounts for UK students abroad
Read article
Saving
June 14, 2024
The Cost of Marriage: Effects of a Wedding on Your Financial Life
Calculate how much your wedding might cost you
Read article
Investing
October 28, 2022
Portfolio Risk Analysis: Measuring Investment Vulnerability
How to measure and react to the risk in your investment portfolio
Read article
Guides
April 3, 2023
The Capital Gains Tax Guide for the UK
A simple guide to capital gains tax in the United Kingdom
Read article
Saving
May 2, 2022
The Cheapest Digital Nomad Locations: Where to Go on a Budget
Tips for moving abroad from the Strabo team
Read article
Investing
February 22, 2024
The Best Investment Options in UAE
Tips for investing in the UAE from the Strabo team
Read article
Saving
April 4, 2022
Create Budgets: Best Finance Apps in Australia for You
Tips for saving money if you're in Australia
Read article
Investing
August 2, 2024
The Best Digital Asset Management Software for the United Kingdom
Today we're breaking down the best software to manage your assets
Read article
Saving
December 16, 2022
The Best Finance Apps for Couples: Manage Your Money Together
Try out Strabo or one of the other apps designed for couples to manage their finances
Read article
Investing
March 7, 2022
The Best Investing App in Europe: Find Out Which One is Right for You
Look no further - a breakdown of the best investing apps for Europeans
Read article
Investing
April 18, 2022
The Best Bank Account for UK Landlords
A brief exploration of what makes a good bank account if you have rental property
Read article
Investing
February 14, 2025
What is Mean Reversion, and How Can Investors Use It?
Taking a deeper look at one of the most important statistical concepts in investing
Read article
Saving
May 9, 2022
Best Bank Account for Expats & Digital Nomads: Bank Stack
How best to manage your money strategically across countries
Read article
Company Updates
January 14, 2024
Strabo is Live! 5 Lessons learned from a Public Software Launch
Key learnings from a public SaaS product launch
Read article
Saving
December 3, 2022
The 2022 UK Budget Announcement: Everything You Need to Know
Key headlines from this mornings red suitcase
Read article
Investing
April 4, 2023
Startup Investing Part 2: Venture Capital, EIS and VCT
A follow up on investing in early stage companies
Read article
Saving
June 27, 2024
Preparing Your Savings for a Baby: How Much Does it Cost?
Helping you make one of the most important personal decisions in your life
Read article
Financial Independence
June 30, 2022
Should I Put All My Pensions Together?
Helping you decide if separating or combining your pensions is the right choice for you
Read article
Investing
August 5, 2022
Should You Invest in Gold and Silver?
They're huge asset classes, but are they worth your money?
Read article
Investing
July 11, 2024
Smart Strategies for Investing While Living Abroad: An Extensive Guide
An expat's help guide for investing abroad
Read article
Investing
November 30, 2022
Rental Property: The Best Buy to Let Mortgages for First Time Buyers
How to finance your first rental property
Read article
Company Updates
June 6, 2022
Risk Appetite vs Risk Tolerance: How They Should Impact Your Portfolio
Understanding risk: one of the most important aspects of personal investing
Read article
Saving
July 4, 2022
Paying Down High-Interest Debt: Avalanche vs. Snowball
Are you in debt? If so, this repayment strategy blog is vital for you
Read article
Guides
October 1, 2024
Maximize Your ISA Allowance: Top Tips for UK Investors 2024/25
Make the most of your £20k allowance this year
Read article
Guides
December 3, 2024
Master Wealth in 2024: Smarter Strategies for Your Finances
A categorical summary of top strategies for the year
Read article
Saving
June 23, 2023
Managing Debt: Smart Strategies for Borrowing and Repayment
Get a hold over your debt and how best to complete repayment
Read article
Investing
December 4, 2024
Is Dumping $230K into the S&P 500 All at Once a Bad Idea?
Learning how to invest a lump sum
Read article
Financial Independence
July 29, 2024
Making the Most of Your Pension Pot: Tips for New Savers
Get a grip on your pension with Team Strabo
Read article
Guides
July 10, 2024
Making the Most of a Gift or Bonus: A Practical Guide
Learn the responsible way to manage a lump sum
Read article
Saving
March 14, 2022
Is there a Multi Currency Personal Finance App?
Discover cross-border investing with a multi currency finance app
Read article
Financial Independence
December 3, 2022
Is Passive Income Possible Through Dividend Investing
Capture company earnings with strategic dividend investing
Read article
Investing
August 22, 2024
Investment Strategies in the UK: What You Need to Know
Explore practical strategies to become the best investor you can
Read article
Investing
April 24, 2023
Investing in US Stocks from the UK: A Finance Guide
Capturing upside from the US stock market
Read article
Investing
December 3, 2022
Investing Strategies for Market Turmoil
Navigate the inevitable market disruption with a proper strategy
Read article
Saving
June 1, 2022
I Have No Savings at 30: What do I do?
Don't panic - let's look at your financial situation
Read article
Investing
June 10, 2022
Investing During a Bear Market: Tips to Protect Your Portfolio
Navigate market turmoil with a robust investing strategy
Read article
Investing
June 27, 2022
Investing in Hated Sectors: Do Sin Stocks Outperform Others?
Sin stocks have the potential to be volatile and risky. But do they outperform the market?
Read article
Investing
October 28, 2023
How to Use Chat GPT as Your Personal Finance Assistant
Leverage AI to improve your investing strategy
Read article
Financial Independence
January 26, 2024
How to Use a Side Hustle to Boost Your Income
Discover how a side hustle can supplement your income and net worth
Read article
Saving
October 18, 2024
How to Prepare for the 2024 Budget
Discover the highlights from the latest red suitcase
Read article
Investing
December 3, 2022
Choosing the Best Stocks for Long-Term Investment: A Guide
How to build a portfolio that endures for the long term
Read article
Investing
September 18, 2024
How to Buy Shares Online in the UK: A Step-by-Step Guide
Get started investing in shares today
Read article
Saving
June 19, 2024
How Much to Spend on Holidays Per Year
Budget for this year's holiday now
Read article
Saving
August 22, 2022
How to Budget and Invest on an Irregular Income
Smooth your freelancer income
Read article
Saving
May 6, 2025
How to budget for a Holiday
Plan your expenses for this year's holiday today
Read article
Financial Independence
February 18, 2025
How Much Should I Be Saving for Retirement? A Practical Guide
Planning your income and expenses for the later years in life
Read article
Financial Independence
February 8, 2023
Fire Movement UK: The Financial Independence, Retire Early Movement
Discover FIRE with Strabo
Read article
Saving
January 20, 2023
How Many Bank Accounts Should You Have in the UK?
Set up your bank stack with the help of Team Strabo
Read article
Company Updates
June 7, 2022
How Crowdfunding Works for Startups
Discover fundraising tips from Team Strabo
Read article
Saving
December 3, 2022
How Best to Navigate the UK Tax Code: Your Guide for Consumers
Paying tax in the UK can be confusing. Here's our short guide
Read article
Saving
January 21, 2024
Clever Ways to Save Money When You Get A Pay Rise
Make the most of that extra cash each month
Read article
Investing
September 7, 2022
Futures and Options: What are They, and How to Trade Them
Learn about some of the more esoteric ways to invest with Strabo
Read article
Guides
July 16, 2024
Useful Expat Tax Advice: Maximise Savings & Avoid Penalties
Make the most of overseas tax regimes today
Read article
Saving
November 1, 2024
Do You Need an AI Financial Assistant?
Using modern AI to augment your personal finance management
Read article
Investing
August 11, 2022
Electric Vehicle Stocks are on the Rise: Should You Invest?
Discover investing potential in the financial markets' latest trend
Read article
Financial Independence
November 29, 2022
Do You Need a SIPP & What are the Withdrawal Rules?
Using a Self Invested Personal Pension to accelerate retirement savings
Read article
Financial Independence
June 20, 2022
Do You Need a Global Wealth Manager
A brief guide to using a cross-border financial adviser
Read article
Investing
September 6, 2024
Cryptocurrency vs. Stocks: what’s the difference?
Learning the fundamental difference between two of the most important asset classes
Read article
Financial Independence
July 24, 2024
Detailed Breakdown of Pension Schemes in the UK
Learn about the different types of UK retirement accounts
Read article
Investing
August 16, 2024
Choosing the Top Real Estate Management Software in the UK
Manage your rental properties more effectively with specialist software
Read article
Investing
August 13, 2024
Cheapest Way to Buy Shares in the UK: A Practical Guide
Learn how to get started investing in stocks in the United Kingdom
Read article
Saving
December 3, 2022
Chancellor's 2022 UK Budget Announcement: The Update
Discover updates from this year's red suitcase
Read article
Saving
October 13, 2024
Cash Flow Planning: How to Draw From Your Portfolio
Withdrawing money from your portfolio in the most effective way
Read article
Investing
March 1, 2023
Calculate Your Investment Portfolio Diversification With Strabo
Use our handy tool to figure out how diverse your portfolio is
Read article
Guides
August 8, 2024
Budget of Paris Olympics 2024: Costs, Funding, and Economic Impact
Learn about some of the key financials behind this year's biggest sporting event
Read article
Investing
February 27, 2025
Best Investing Apps for Beginners UK: Top Choices to Start Your Investment Journey in 2025
Learn how best to get started with your first investment with Team Strabo
Read article
Guides
November 7, 2024
Balancing Holiday Expenses with Long-Term Goals in Your 30s
How best to split your spending between work and play
Read article
Guides
October 11, 2024
11 Essential Financial Calculators to Simplify Your Finances
Start using Team Strabo's favourite tools today
Read article
Investing
August 2, 2022
Portfolio Construction Begins with Asset Allocation: A Guide
Learn how to allocate your funds effectively between assets
Read article
Investing
November 12, 2024
Achieve Your Financial Goals in Your 30s with Strabo AI
Leverage our AI financial assistant to get the most out of your portfolio
Read article
Investing
July 8, 2022
10 Tips for Contracts and Tenants for Your First Rental
Avoiding the most common pitfalls with your first investment property
Read article
Financial Indep
September 12, 2024
10 Effective Tips to Get Your Finances on Track
Get the basics right with Team Strabo
Read article
