Where to put my money?

babyblooz

Hubby and I are going to see Barclays this week about what they can offer us in terms of our ISA savings. The guy on the desk mentioned something about a five year plan, with a guaranteed 2 and half percent plus the chance it could go up to five and half percent. Dunno exactly what it is just yet, but it keeps your tax free status and guarantees your inital sum etc.

Then went across to A and L, and asked them, and they say they can do something more profitable. Need to see their advisor. It's going to be money that we don't need for at least a couple of years, but not sure about tieing it up for five years. I just want my money to make a bit more than the poor ISA rate its getting now. It's getting 2.05 now at A and L but its not fixed.

Anyone got any ideas on what might be coming, and any tips or advice.

uih039

babyblooz wrote: »

Hubby and I are going to see Barclays this week about what they can offer us in terms of our ISA savings. The guy on the desk mentioned something about a five year plan, with a guaranteed 2 and half percent plus the chance it could go up to five and half percent. Dunno exactly what it is just yet, but it keeps your tax free status and guarantees your inital sum etc.

Then went across to A and L, and asked them, and they say they can do something more profitable. Need to see their advisor. It's going to be money that we don't need for at least a couple of years, but not sure about tieing it up for five years. I just want my money to make a bit more than the poor ISA rate its getting now. It's getting 2.05 now at A and L but its not fixed.

Anyone got any ideas on what might be coming, and any tips or advice.

The usual "Guaranteed Equity Bonds" I'm sure. They're all over the place at the moment. You get a proportion of any rise in the market but are protected if it drops. The catch is you don't get dividend income and your gains are (probably) capped.

Very poor products in my opinion.

I would strongly advise you to talk to an Independent Financial Adviser (IFA). By seeing Barclays or A&L you are tied to their products only which may not be suitable for you.

(Just for the record, I am not an IFA!)

Andrew.

babyblooz

Thanks for that Andrew! How much does it cost to see an IFA, and is there anything else on the market worth it for us with smaller amounts to invest? It has to be safe, and it has to be secure, because it's going to be my pension from age 60 to 65 until my pension proper kicks in.

Newly_retired

If it has to be safe, then you probably do not have the risk profile to invest?

uih039

babyblooz wrote: »

Thanks for that Andrew! How much does it cost to see an IFA, and is there anything else on the market worth it for us with smaller amounts to invest? It has to be safe, and it has to be secure, because it's going to be my pension from age 60 to 65 until my pension proper kicks in.

I am not an IFA, but I believe an initial meeting with an IFA would be free. This would give you an opportunity to assess whether it is mutually beneficial for you to work together. Some IFAs are fee based: they charge an amount per hour or perhaps a fixed fee for a distinct piece of work. Other IFAs work on commission: they receive commission from the companies in which they advise you to invest. In this instance they should be totally open with you and would normally give you part of the commission, usually by investing more than you have paid, say 105%. You should negotiate and agree fees at an early stage so that this does not get in the way of the advisory process.

I recall using an IFA to assess whether I should transfer my defined benefits pension fund from my previous employer to my current employer. She produced a comprehensive report with appropriate advice and I believe the fee was £400 about 5 years ago. That may give you some idea.

Others better qualified than me will be along soon to correct or add to my comments (? Dunston ?).

You can use this site to find a local IFA:

http://www.unbiased.co.uk/

Andrew.

babyblooz

thanks everybody! I suppose I just want to make the most of what I've got without risking it. Everyone who knows me knows how I play EVERYTHING safe, so I would feel happier just switching it around everyear year if need be to get the best rate, say from ISA to ISA.

I don't mind tieing it up for a bit longer say to get a higher rate, but anything else just makes me so wary. Plus, I don't have much free time to investigate, research, read up on things anyway, so maybe like the saying goes 'if in doubt, do nowt!'

Mrs_Money

Hi Babyblooz
have you thought about a Fixed rate ISA bond - these are around 3% - 3.50% (depending on whether you fix for 1, 2 or 3 years) at Nationwide. They've told me it won't affect my cash ISA and I can keep adding my £3600 allowance to that every year (but not to the bond). Just a thought.
I'm just in the process of trying to transfer a lump from my mini cash ISA at the mo but Nationwide is "short staffed" or "doesn't have a terminal free" the last 2 times I've been in to the branch- they are holding my application form and I told them today I expect the rate on the application form to be honoured - they said it would, so I'm hoping it will be done by tomorrow!

babyblooz

now that sounds more like my kind of thing, any recommendations on the best providers?

demotw

uih039 wrote: »

The usual "Guaranteed Equity Bonds" I'm sure. They're all over the place at the moment. You get a proportion of any rise in the market but are protected if it drops. The catch is you don't get dividend income and your gains are (probably) capped.

Very poor products in my opinion.

I would strongly advise you to talk to an Independent Financial Adviser (IFA). By seeing Barclays or A&L you are tied to their products only which may not be suitable for you.

(Just for the record, I am not an IFA!)

Andrew.

bah incorrect, barclays use select planning, we use many different providers like friends provident and are certianly not restricted to our own products by any means.

it sounds like your talking about the defined investment bond, which is either a 3/4/5 year bond. Its a capital protected bond, and will pay a fixed rate of approx (figures are not exact but close) 4% over 3 years, 5% over 4 years and 6% over 5 years (prolly a bit higher). This rate is paid providing the ftse is at least at the same level it is now. The ftse is low atm, so alot of ppl looking at this, but who knows what will happen in a few years so your interest could be at risk, but as i said capital is protected

Mrs_Money

Hi again - Babyblooz - I can only find some details of Fixed rate ISA's and the Nationwide ISA bond have a look here - on the Moneyfacts website good luck with it!

uih039

demotw wrote: »

bah incorrect, barclays use select planning, we use many different providers like friends provident and are certianly not restricted to our own products by any means.

it sounds like your talking about the defined investment bond, which is either a 3/4/5 year bond. Its a capital protected bond, and will pay a fixed rate of approx (figures are not exact but close) 4% over 3 years, 5% over 4 years and 6% over 5 years (prolly a bit higher). This rate is paid providing the ftse is at least at the same level it is now. The ftse is low atm, so alot of ppl looking at this, but who knows what will happen in a few years so your interest could be at risk, but as i said capital is protected

Ok, let's talk about this.


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I said “Guaranteed Equity Bonds”

You said “Defined Investment Bonds”

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I said “You get a proportion of any rise in the market”

You said “It pays a fixed rate of ….providing the FTSE is at least at the same level as now”

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I said “…but are protected if it drops”

You said “…capital is protected”

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I said “You don’t get dividend income”

You did not comment on this, but I’m sure it is true for this product. The current yield on the FTSE ALL-SHARE is between 4% and 5% so this is foregone by choosing this Barclays product compared to buying a FTSE tracker.

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I said “Your gains are capped”

You said “It’s a capital protected bond and will pay a fixed rate…” so if the FTSE goes up by 100% over the period of the Bond, you still only get 4/5/6% per year.

**************************************

Now, I would suggest that the only material difference between us is that I guessed that the product pays a proportion of any FTSE rise. So, for example, if the FTSE rises 20% then you get 15%. In fact, the return is fixed at 4/5/6% per year. I accept this is different to my description but I feel my comments were correct in all other regards. In my opinion this is a poor product. The additional interest over other fixed rate investments which are not reliant on a rise in the FTSE is not worth the risk.

*****************************************

Now, let’s turn to Barclays Financial Planning Service (let’s call it BFPS).

I believe that BFPS advisers are limited to a specified number of providers. They are given a list by their Head Office. When I use the term “...tied to their products only”, I did not mean only Barclays products and I admit I could have been more clear on this. I mean that BFPS advisers have a finite list of products they are allowed to consider on behalf of the client. IFAs have an unlimited list of many thousands of products.

However, I am not naïve enough to suppose that IFAs are not influenced by the level of commission on each product but at least they have an open book to start with.

As an example, would a BFPS adviser be permitted by internal policy to recommend a Royal Bank of Scotland fund?

I’m enjoying this debate but I readily admit I am not an expert and just commenting on my general knowledge of the market.

I do hope an IFA comes on this thread to add to the debate.

Andrew.