Starting To Save
Discussion
Evening Pistonheaders!
I now have my first 'proper job', I'm 20 so upto now all of my money was urinated away on a Saturday night! I want to change my ways and start to save some money.
I'm looking for some advice on how to save. People have mentioned ISA's to me but i'm not to sure really how they work.
I will have around £550-600 per month to save, I would not be bothered about not being able to touch the money for a certain timeframe.
Sorry it may sound vague!
Ben
I now have my first 'proper job', I'm 20 so upto now all of my money was urinated away on a Saturday night! I want to change my ways and start to save some money.
I'm looking for some advice on how to save. People have mentioned ISA's to me but i'm not to sure really how they work.
I will have around £550-600 per month to save, I would not be bothered about not being able to touch the money for a certain timeframe.
Sorry it may sound vague!
Ben
Cash ISAs are essentially like a normal saving account, with a couple of differences. Firstly you can only pay in £5640 a year and secondly that you don't pay any tax on the interest. Withdrawal arrangements vary from account to account.
Given you will have somewhere around £6k to save per year, it looks like a pretty ideal fit. You need to shop around as the interest rate does vary - and it's likely that you'll need to transfer the account every year to keep a good rate of interest, which is a bit of a hassle but only takes a couple of hours.
It's a nice way to get into investment because the money is government guaranteed and usually instant access.
Given you will have somewhere around £6k to save per year, it looks like a pretty ideal fit. You need to shop around as the interest rate does vary - and it's likely that you'll need to transfer the account every year to keep a good rate of interest, which is a bit of a hassle but only takes a couple of hours.
It's a nice way to get into investment because the money is government guaranteed and usually instant access.
The ISA wrapper looks as if it will be ongoing, same happened for TESSAs (previous version before ISAs) in one way or another. When it changed to ISAs the TESSAs continued. You can transfer them to another provider, but once you withdraw the money, you can't put it back again, unless you use your next years allowance.
The full £11,280 can be invested in a stocks and shares ISA, and up to half of this (£5,640) can be saved in a cash ISA.
The cash ISA rates have been pretty poor recently, so be careful, especially with one year bonuses, that make them very uncompetitive in the 2nd year.
The full £11,280 can be invested in a stocks and shares ISA, and up to half of this (£5,640) can be saved in a cash ISA.
The cash ISA rates have been pretty poor recently, so be careful, especially with one year bonuses, that make them very uncompetitive in the 2nd year.
Opps 4% for normal account 6% for Premier....
http://www.hsbc.co.uk/1/2/savings-accounts/regular...
And again at 20 might not work for you but you can do £250 each on a joint account......
http://www.hsbc.co.uk/1/2/savings-accounts/regular...
And again at 20 might not work for you but you can do £250 each on a joint account......
Premium Bonds? Cash ISA?
Really?
You are 20 - take some risk with it!
I would get a Stocks and Shares ISA and bung it all in some FTSE250 shares!
Regular investing will iron out peaks and troughs. Buy and hold - and set the account to do automatic dividend re-investment for you. Anything else is just a waste of time and effort.
Really?
You are 20 - take some risk with it!
I would get a Stocks and Shares ISA and bung it all in some FTSE250 shares!
Regular investing will iron out peaks and troughs. Buy and hold - and set the account to do automatic dividend re-investment for you. Anything else is just a waste of time and effort.
In around 80% of cases a tracking funds beats a managed fund over the long term.
If you want a degree of safety built in then I'd say tracked. FTSE 250 or 100. Managed funds can promise bigger gains but they can easily go belly up if even one of the big accounts they buy into hits major difficulty.
Trackers are also cheaper to buy into (usually free) and have a very low yearly charge (0.25 for HSBC). Some managed funds charge 5% so you need to earn that back before you even start to make profit.
If you want a degree of safety built in then I'd say tracked. FTSE 250 or 100. Managed funds can promise bigger gains but they can easily go belly up if even one of the big accounts they buy into hits major difficulty.
Trackers are also cheaper to buy into (usually free) and have a very low yearly charge (0.25 for HSBC). Some managed funds charge 5% so you need to earn that back before you even start to make profit.
raptor600 said:
Premium Bonds? Cash ISA?
Really?
You are 20 - take some risk with it!
I would get a Stocks and Shares ISA and bung it all in some FTSE250 shares!
Regular investing will iron out peaks and troughs. Buy and hold - and set the account to do automatic dividend re-investment for you. Anything else is just a waste of time and effort.
+1 Premium bonds will get you a loss in real terms absolutely zero point looking at those. Really?
You are 20 - take some risk with it!
I would get a Stocks and Shares ISA and bung it all in some FTSE250 shares!
Regular investing will iron out peaks and troughs. Buy and hold - and set the account to do automatic dividend re-investment for you. Anything else is just a waste of time and effort.
Worth a thought http://www.ft.com/cms/s/0/f63fa5ec-1dfe-11e2-8e1d-...
Matt.. said:
Sorry to jump in on this... but can anyone recommend a good stocks + shares ISA?
HSBC and I think L&G do index trackers at next to zero cost.Forget looking for alpha in hedge funds or managed funds, you likley wont find it.
http://www.ritholtz.com/blog/2012/01/2011-disastro...
Look to invest and pay as near to zero as you can for it. Fee's can eat 60% of your gains over time. So avoid them.
H&L do good lost cost stuff as well.
Look to Maxing out your ISA every year. If you find you can put away more than that you might be worth looking into a SIPP or similar. But if your work offers you free pension money take it. All workplaces will have to by 2015. Try and max out their contribution. You might find your £500 you want to put away after tax is better spent as salary sacrifice and perhaps actually ends up then at £750 a month matched by your employer. So you may well be able to put away £1500 gross instead of the £500 net that ends up in your hand.
So some research and all will be well..
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