Investment strategies for general accounts

If you’re looking to invest without restrictions on how much you pay in and when you can take money out, then a general investment account (GIA) could be for you. 

They don’t offer the tax benefits of a pension or an ISA, but if you’ve used up the annual allowances for these and you’re still looking for long-term returns, they can help. We’ll take you through how they work, the tax you may have to pay and how you can plan a GIA investment strategy that helps meet your long-term goals. 

Remember, the value of investments can fall as well as rise, and you may get back less than you’ve paid in.

You can shape the way you invest in a GIA based on your plans and whether you need an income from your investments. Here are some ways you can invest to fit your goals. 

Income investing

As the name suggests, these investments will aim to provide you with a regular income. These can be bonds, company shares that pay dividends or real estate investment trusts (REITs). The aim of an income strategy is to make stable investment choices that deliver reliable returns over time. This can be a good choice if you’re retired and looking for extra income. 

Value investing

This involves finding undervalued investments and can be tricky if you’re making your own investment decisions, rather than relying on a fund manager, as you’ll need to be able to understand a company’s financial results. Generally, value investors look at things like the share price to earnings ratio (P/E) and cashflow of companies. For example, companies with a low P/E ratio may be creating value that’s not reflected in their share price. This may mean an increase in the share price is due. Value investing doesn’t always pay off quickly and there’s no guarantee companies will see an increase in their share price. This investment strategy usually includes sectors like oil and gas, financials and other traditional industries.

Growth investing

This looks at companies with the potential for earnings growth. These don’t have to be up and coming companies - large established ones still see big jumps in their share price. While growth investing can see higher returns than the broader market it can come with bigger risks and more volatility.

Of course, you don’t have to stick to one strategy. You can mix investments in a GIA in a way that suits you, by blending income, value and growth investments.

Popular investment types and strategies for GIAs

Even when you’ve decided on the type of investments you want in your GIA, there are still other ways you can refine your choices. 

ETF and index funds – these are investments that track an index like the FTSE 100. They’re a way to spread investments in your GIA, and they usually have low management fees. ETFs and index funds often cover the same areas but are traded slightly differently. You can find a full explanation of how ETFs work in our article. 

Actively managed funds – these are investments where a fund manager actively manages the fund. They use their research and knowledge to buy and sell the investments within the fund.

Pound-cost averaging – this is a way to balance out rising and falling prices for investments in a GIA by paying in fixed monthly amounts. Investing regularly can help to smooth out the price you pay.

Thematic investing – this includes investing in sectors experiencing high growth, like technology companies involved in artificial intelligence (AI) or renewable energy. One issue with thematic investing is that you’re very exposed to the performance of that sector, meaning it can be riskier. 

Multi-asset investing – this combines equities, bonds, commercial property and other investments like REITs to spread your risk and diversify. For example, mixing high-growth stocks with bonds can provide stability.

Diversifying your portfolio is important. This means choosing different investments with different risk levels or that come from different sectors or regions of the global markets. By doing this, the value of your GIA won’t be as affected by poor performance in one area. Here are some ways you can diversify your investments. 

By investment type

In your GIA you can choose investments with different risk levels. For example, company shares (equities) can deliver high returns, but can also see significant drops in value. They therefore come with higher risk. Within fixed income, government bonds and investment grade corporate bonds – UK and overseas bonds – tend to be less risky and so are more stable than company shares, but their returns will be lower.

Meanwhile, global high yield bonds, which could be a way for you to diversify the fixed income investments in your GIA portfolio, offer the potential for higher returns over the long term. However, please note that global high yield bonds are issued by companies with lower credit ratings, and they are therefore classed as lower quality bonds, which means that they are riskier investments.

Having a GIA portfolio with a mixture of equities and bonds can give you growth potential, but also mean you’re less likely to see material losses. Investment funds are a good way to spread the type of investments you hold. You can find a full list of our investment funds with Aviva.

By sector

Investing in different industries, like technology, healthcare, consumer goods, and energy, means that you’re not relying on the performance of one part of the market. So, if one area like technology stocks are underperforming, having companies which cover consumer goods or healthcare in your portfolio could balance it out, if they’re doing well. 

By location

Holding investments from different regions around the world can help shelter against events in other parts of the world like economic weakness or political instability. Some countries are faster growing, such as Asia, but this comes with more risk. Some index funds and ETFs invest globally, so they can therefore help balance your portfolio.

A GIA doesn’t have the tax benefits of a pension or an ISA. If you make gains, then you may have tax to pay when you cash in your investments. You can see the rates for the tax year 2025/2026 below. 

Capital Gains Tax 

Each year, you have a Capital Gains Tax (CGT) allowance, which applies to things you own that have increased in value – like investments or antiques. You have an annual allowance of £3,000 when you sell before paying CGT. Over that, you’ll pay 18% at the basic rate of tax or 24% if you’re a higher-rate taxpayer. 

Dividend tax 

With any dividends you collect as income, you’ll have a £500 allowance; after that, they’re taxed at 8.75% for the basic rate, 33.75% for the higher rate or 39.35% if you pay additional rate tax. 

Income tax on interest

Interest from bonds or cash is taxed based on your rate of income tax. You may be entitled to a Personal Savings Allowance (PSA) to reduce any liability, depending on your marginal rate of tax. This is £1,000 for basic rate taxpayers, £500 for higher rate taxpayers, but no relief for additional rate taxpayers.

There are ways you can minimise the tax you pay when you’re using a GIA, though. Here are some strategies to reduce your tax bill. 

Choose tax-efficient funds – investments in UK-based OEICs (open-ended investment companies) aren’t liable for CGT. 

Use your losses – any investments you sell at a loss can be deducted from your capital gains for up to four years. 

Split your sales – by splitting the sale of your investments across tax years, you can make use of your new CGT allowance. 

Move to a SIPP or ISA – you can choose to transfer investments within your CGT allowance to these more tax-efficient wrappers. 

Tax allowances are based on personal circumstances and are subject to change.

Once you’ve set your investments in GIA, it’s a good idea to review things every so often. This gives you a chance to see how different parts of your portfolio are performing. 

This is important as it gives you a chance to manage your risk by selling any investments that may have become too large or ones that aren’t performing well. You should also look at your investments based on your goals and lifestyle. For example, if you’re closer to retirement and plan to start taking money from your GIA, you may want to try and secure its value by switching to income-based investments like bonds rather than growth investments like shares. 

Taking professional financial advice when you’re investing can be a good idea. You can find an independent financial adviser at Unbiased.co.uk – there will be a charge for advice.

Any companies mentioned in this article are used as examples only and are not investment advice.