Savings for a noob!

[geeks]

Right be gentle..

For the first time ever (beyond a company pension) i am looking into forming some soret of savings, sort of a medium to long term type saving rather than short term. I have a savings account with my bank for short term things such as holiday spending money etc.

So looking around i have a number of options but i will be honest when it comes to money and savings etc i am an utter noob and pretty useless. I have little to no understanding of what an ISA is or what an investment fund is.

I don't have much to play with, we are talking £100ish pcm, pocket change to the PH Director but to me is is give or take 5% of my takehome pay some months i may have more, but if i do it will go into the short term savings unless it is a substantial amount, but it will be no less than this.

So PH where do i start?

[Ginge R]

Geeks,

Read this first.

http://www.morningstar.co.uk/uk/news/68146/A-Guide...

We all blather on about attitude to risk, but for many people, their capacity for loss is even more important.

[Zoon]

I'd say something like an OEIC Fund (or two) inside an ISA with dividends reinvested should give you a decent return.

[Ozzie Osmond]

All good stuff from Ginge.

Ozzie's view,

• If you save cash you are probably going backwards, even in an ISA. Inflation is rising faster than the interest you earn.
• If you are happy to lock the money away to age 55, invest in a pension. Probably what's called a SIPP. You get free money from the government to boost your savings.
• If you want complete flexibility, invest in an ISA.
• ISAs are available from Fidelity, Hargreaves Lansdown and others. The two I named are very noob-friendly.

As regards what to invest in, and having regard to risk, there are a number of well regarded "UK equity Income" funds which you can buy. In other words, pooled stocks and shares to spread the risk.

Risk? Yes, there's always risk on the stock market. But for you to lose all your money,

• BP would have to stop selling petrol
• Tesco would have to stop selling food
• Barclays would have to stop being a bank.

If stock market risk doesn't sound comfortable there are also "bond" funds which should be more secure. Less downside risk but that's offset by lack of growth potential.

[Ozzie Osmond]

Zoon said:

I'd say something like an OEIC Fund (or two) inside an ISA with dividends reinvested should give you a decent return.

Yes, succinctly put!

[geeks]

Cheers for the help. Looks like i have some reading to do.. although i will confess to feeling out of my depth already!

[CRB14]

I was always told that the staple fund was the Invesco Perpetual High Income Accumulator. It's done me well and is easy investing that takes the time and risk out of stock picking.

They pay a bi-annual div and you get the potential growth. The fees can be high on some funds though.

I'm a big reader of http://monevator.com/

Have a good read of some of those articles. There's some sound advice there but just bear in mind that it's more of a blog of an investor.

Also the Motley Fool is a great website.