What should we do?

HLXPAX

My wife has not been paying into any type of pension or savings since our second child was born nearly 6 years ago due to her giving up work and we want to start putting some money away so she has some kind of pension/money coming in but don't have a clue what to do?

Any ideas? would ideally be wanting to put something like £40 max a month away not a lot but is really all we can afford in the current climate.

Many Thanks

HLXPAX

McKneff

are you paying into a pension.
Will she be job huntins soon, if so the company she gets a job with may well have a pension scheme.

EdInvestor

Better to open an ISA first, possibly a cash one until we see the markets return to more normal behaviour.You can convert the ISA into either an investment one or a pension later if you waqnt to.

Have you checked out her state pensions? Get a forecast here:

https://www.thepensionservice.gov.uk

HLXPAX

Anniehanlon

Thanks for that, no she isn't going to be in a works pension for the time being only because she will only be working so few hours not being offered a company pension.

Edinvestor

Will check her state pension,thanks as for Cash ISA i was thinking that might be a stop gap till the markets improve.

Many Thanks

HLXPAX

dunstonh

Ed wasnt talking about cash ISA but S&S ISA.

Cash ISAs dont make good retirement plans unless you are closer to retirement age.

EdInvestor

dunstonh wrote: »

Ed wasnt talking about cash ISA

I was actually. At the moment for many people they make more sense than an S&S ISA, and can be converted later when markets stabilise. There is no point in ignoring people's worries and there are problems with supposedly safe 'cash' funds in pensions .

dunstonh

I was actually. .

That makes a change.

At the moment for many people they make more sense than an S&S ISA, and can be converted later when markets stabilise.

You mean after they have gone up and the that growth has been missed?

EdInvestor

dunstonh wrote: »

You mean after they have gone up and the that growth has been missed?

They may miss some, but you can't expect ordinary investors to time markets ( many fund managers seem to find it very hard as well :rolleyes: )


For some it will be better to make a bit less, but have less worry. If people are not bothered by market volatility then this doesn't apply of course.

dunstonh

They may miss some, but you can't expect ordinary investors to time markets ( many fund managers seem to find it very hard as well :rolleyes: )

Exactly, you cant expect ordinary investors to time the market but that was what you were effectively suggesting they do.

In the long run, 6-18 month of potential volaility is really going to be make little difference over 20 or 30 years. They can also expect a number of events like this in that timescale as well.

EdInvestor

dunstonh wrote: »

Exactly, you cant expect ordinary investors to time the market but that was what you were effectively suggesting they do.

Not really.Timing markets relates to putting money in at the bottom so as to make money as they rise - as you suggest. But what bothers people more, one suspects, is volatility, markets bouncing up and down. So I'm suggesting that they wait until things are a bit quieter - not necessarily on the rise, just more stable.

In the long run, 6-18 month of potential volaility is really going to be make little difference over 20 or 30 years. They can also expect a number of events like this in that timescale as well.

But many people simply don't have the experience or temperament to deal with the volatility, especially now there are no weasel words (smoothing, guarantees,etc ) wrapped around investments, like in the old days..

Of course if people paid more attention to their invested money and to the behaviour of the markets, many of them would grasp how they work and the volatility would cease to be such a threat.

jamesd

HLXPAX wrote: »

thanks as for Cash ISA i was thinking that might be a stop gap till the markets improve.

There's a big sale on at the moment for investments. What you're suggesting is not buying during the sale but instead awaiting until it's over and buying then. Doesn't make sense as an investment decision.

The only reason to do it is to accept making less money for the comfort of not being concerned about all the doom-mongering news reports.

Better long term to get used to buying while everyone is worried because that's what you need to be doing to get the best results. The time you should be worried is when everyone is talking about a never-ending boom and is hugely optimistic. That's when you should be looking to gradually switch money to safer investments that won't go down as much when the boom changes to bust.

Individual investors are renowned for buying at high prices during booms,then getting worried and selling at low prices during busts. Exactly the opposite of what they should be doing to make the most money.