Long term savings - good returns??

Long term savings - good returns??

Author
Discussion

Paul_B

Original Poster:

792 posts

175 months

Tuesday 21st June 2016
quotequote all
Hi,

I'm wondering what is out there where I can put a small amount of money away each month and get decent returns on it.

I'm after a long term plan, I'm not worried about being able to access it until our kids are 18 or thereabouts (they are 2 years and 3 months at the moment).

I'm currently putting £60 a month away into a savings account which is pretty rubbish.

A friend at work was saying he puts a small amount each month into an investment company and his monthly returns are far greater than what he puts in. Obviously these fluctuate but overall the gains are very good. He showed me a statement which shows his money has effectively doubled! He mentioned P.E.P which in having a quick google search these don't seem to exist anymore?

So my question is, is there anything similar out there which is going to be better than a savings account or an ISA which also seem to be quite low returns?

Any advice would be much appreciated.

Apologies if this topic has been covered before, happy to be redirected and this closed down if that's the case.

Jockman

17,912 posts

159 months

Tuesday 21st June 2016
quotequote all
I put in £80 per month to a pension for my grandchildren and step daughters. Seven in total. The govt rounds this up to £100 with tax relief.

Plus investment return obviously.

Not for everyone but suits me.

Ozzie Osmond

21,189 posts

245 months

Tuesday 21st June 2016
quotequote all
If you want something for them at 18 I'd start "junior ISAs" and buy some mainstream stocks & shares funds.

Either of Fidelity or Hargreaves Lansdown are big in this area, have helpful websites and are very accustomed to dealing with small investors. (There are other providers who may apply lower charges.)

https://www.fidelity.co.uk/investor/isa/open-junio...

http://www.hl.co.uk/partners/search/junior-isa?the...

You really do need to head for the stocks & shares funds rather than savings in cash. Cash returns are shocking - you're going backwards after inflation - and it's a waste of ISA tax relief not to be targeting decent positive returns. (Yes, there is some risk in the stock market.)


Jockman

17,912 posts

159 months

Tuesday 21st June 2016
quotequote all
Lifetime ISAs available next April.

Govt will put in 25% on a £4K contribution.

Craikeybaby

10,369 posts

224 months

Tuesday 21st June 2016
quotequote all
I've set up a separate fund within my stocks and shares ISA for my son, I did think about a Junior ISA for him, but as I am not using my ISA limit I am using some of if for him, so I have control of the money, rather than him automatically getting it on his 18th birthday.

Simpo Two

85,148 posts

264 months

Tuesday 21st June 2016
quotequote all
Jockman said:
Lifetime ISAs available next April.

Govt will put in 25% on a £4K contribution.
Regardless of tax status? Sounds a bit like a pension...

Jockman

17,912 posts

159 months

Tuesday 21st June 2016
quotequote all
Simpo Two said:
Jockman said:
Lifetime ISAs available next April.

Govt will put in 25% on a £4K contribution.
Regardless of tax status? Sounds a bit like a pension...
Not just any old pension......the future of all pensions some say biggrin


sidicks

25,218 posts

220 months

Tuesday 21st June 2016
quotequote all
Paul_B said:
Hi,

I'm wondering what is out there where I can put a small amount of money away each month and get decent returns on it.

I'm after a long term plan, I'm not worried about being able to access it until our kids are 18 or thereabouts (they are 2 years and 3 months at the moment).

I'm currently putting £60 a month away into a savings account which is pretty rubbish.

A friend at work was saying he puts a small amount each month into an investment company and his monthly returns are far greater than what he puts in. Obviously these fluctuate but overall the gains are very good. He showed me a statement which shows his money has effectively doubled! He mentioned P.E.P which in having a quick google search these don't seem to exist anymore?

So my question is, is there anything similar out there which is going to be better than a savings account or an ISA which also seem to be quite low returns?

Any advice would be much appreciated.

Apologies if this topic has been covered before, happy to be redirected and this closed down if that's the case.
An ISA is just a tax efficient wrapper - you can have very safe (cash) or risky (equities) in an ISA which have massively different risk profiles and hence massively different opportunities for high returns / losing your capital...

Simpo Two

85,148 posts

264 months

Tuesday 21st June 2016
quotequote all
Jockman said:
Not just any old pension......the future of all pensions some say biggrin
No need for a private pension anymore, we'll have 20M immigrants to pay for our pensions with all that tax they're going to pay!

Paul_B

Original Poster:

792 posts

175 months

Tuesday 21st June 2016
quotequote all
Thanks for the replies everyone. I will do some more digging into stocks and shares ISAs. Sounds like this is the sort of thing I'm after.

Ozzie Osmond

21,189 posts

245 months

Wednesday 22nd June 2016
quotequote all
Craikeybaby said:
I've set up a separate fund within my stocks and shares ISA for my son, I did think about a Junior ISA for him, but as I am not using my ISA limit I am using some of if for him, so I have control of the money, rather than him automatically getting it on his 18th birthday.
Depending on your overall financial position and life expectancy, don't forget that if it's in the kid's name you can give £3,000 a year completely outside Inheritance Tax and after 7 years any size of gift falls outside IHT. Using your own ISA may risk an IHT charge later but does enable you to keep full control.

Jockman

17,912 posts

159 months

Wednesday 22nd June 2016
quotequote all
Ozzie did I read somewhere recently that ISAs now fall out of your estate for IHT purposes or am I getting muddled?

Ozzie Osmond

21,189 posts

245 months

Wednesday 22nd June 2016
quotequote all
Insofar as some pensions can now pass outside your estate I suspect they may be making similar noises about the new proposed "Lifetime ISA".

AFAIK mainstream ISA is within your estate. Happy to be corrected if wrong!

Jockman

17,912 posts

159 months

Wednesday 22nd June 2016
quotequote all
Just had a quick peak and its the tax free status that has changed when passing on to your spouse or civil partner. You are now allowed to keep the tfs.

Doesn't affect your example so ignore me.