savings

[bazzaloo]

Hi, i have just surrended an endowment policy and want to place the �50 per month in to something for my retirement rather than just doing nothing with the money. I already have two other pensions so this is towards them. Any sugestions to what is best to do with the monthly amount? I dont intend touching the money and the money is to stay there accumilating for the next twenty years. Cheers.

[paddy2511]

Hi, HSBC are offering a regular savers, pays a fixed rate of 8% gross, fixed for year, minimum payment of �25 to maximum �250 per month. Also have you taken advantage of tax free savings with a cash isa, the rate should increase the more savings you have as the rates are normally tiered. You should contact your bank and ask for an appointment with their financial planning manager, they will be able to look at longer term savings and they shoudl offer you this service for free sometimes they even offer incentives such as free will writing service when your at the appointment, hope this helps a bit!

[bazzaloo]

Hi thanx for that info, i had considered a cash isa but was unsure if it could be used as a regular savings type of an account?

[paddy2511]

Hi, you can pay in up to �3000 per annum into a cash mini isa, and you can make these payments in a lump sum or by monthly standing order for example which would probably be best for yourself. You dont have to pay in the full �3000 each year but could pay your �50 each month and if you have extra funds, transfer those in aswell. You can open an isa from as little as a �1 so certainly worth looking at. You can only have one isa in any tax year but can build up a nice nest egg for yourself. Also there is no notice required to withdraw your funds so you can get at if you need to which is good peace of mind!

[WendyS]

If you are aiming at a 20 year time span, paying �50 per month into an equity ISA (i.e. unit trusts) might bring you a better long term yield, although in any kind of stock market investment you have to be prepared for ups and downs. Just let the income (dividends) be reinvested rather than drawing it out. Virtually all the research one reads suggests that a 20 year investment in a unit trust (Tax protected in an ISA wrapper) will yield a far higher sum than an ordinary cash savings deposit account. However, ISAs are only predicted to last until about 2009, after which their existence is uncertain so you may want to take advantage of them while they still exist. However hopefully whichever government is in power will continue these tax-free savings in some form or another..

[bazzaloo]

Wendy and Paddy, thanx again for you advice. You have really helped me in such a short time, i have been looking at this for some weeks now! Cheers

[bazzaloo]

Hi Wendy and Paddy

Have you any ideas who the best people are for unit trusts or who have the best deals?

Cheers

[WendyS]

You could try HargreavesLansdown.co.uk. They're a large firm of stockbrokers / financial advisors who offer a huge range of unit trusts protected by an ISA tax wrapper. Their website will give details of all the funds they offer at a discount and they publish regular newsletters to all their investors giving the latest recommendations. The Saturday and Sunday Money Sections of The Telegraph and Sunday Times might also give you some ideas. When selecting a unit trust, there are various sectors and you could opt for a Growth Fund, or an Equity Income Fund & have the dividends reinvested.