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20 year old wishes to start investing for future. Best provider to achieve this.

I'm 20 years old and think I need to stop wasting every penny I earn on junk. So I have decided to put an end to this and start investing some money. I don't have any specific goals but would like to start saving now for for retirement.

I don't think I am disciplined enough to save for retirement in a self select isa even though after doing some research a few people recommend this for flexibility. So I was thinking of a sipp. However I would also like to invest some money in a self select isa for the medium term.

Which provider/providers should I go with?

I have done some research and liked the look of iii (interactive investor) who offer both an isa and sipp. I like their funds builder and portfolio builder option. I'm not looking at investing massive amounts each month so this would be good for me. However am I right to believe their initial costs are higher than some other providers?

I looked at the fund supermarket by thisismoney.com and it appeared to me, their initial commissions are mostly 0% compared to iii who's ranged from 0%-2%.

I don't mind being with two providers. I'm basically looking who low costs and the ability to invest small amounts

Any advice would be appreciated.

Comments

  • debbie42
    debbie42 Posts: 2,586 Forumite
    I have a iii account (for an isa, not a sipp). For the type of share purchases I make they are very reasonably priced (£10 per trade, no annual management charge).

    I haven't investigated using them for funds, and prefer H&L for that.

    However, I'm not at all clued up about SIPPS and how these work.
    Debbie
  • cepheus
    cepheus Posts: 20,053 Forumite
    edited 22 April 2010 at 9:21AM
    What are your pension arrangements with your employer if you have one yet. Saving in a pension via a SIPP or otherwise can be the most tax efficient method of saving, but its a long haul. ISAs are more flexible since you can take the money back when you wan't, this is just a tax saving wrapper of course and doesn't represent the underlying investment.

    You need to think about the class of funds you wish to invest in rather than just the costs. For someone who is young, diversifying some of the investment into emerging markets or at least a world fund may be worth considering, since these have the best chance of a good return over the long term although it is higher risk.
  • If you're starting from scratch, presumably with some monthly payments, I wouldn't be looking at a SIPP just yet!

    A normal pension will probably be your best bet until you build up a good pension base over the next 10-15 years.

    In the meantime, have a look at some Cash ISAs to build up some cash savings. There is no point in you investing in the stock market now if over the next 2-3 years you might need to access your savings - there is always the potential for capital loss especially early on, even in the most balanced of portfolios.

    If you are determined to invest in funds, supermarkets tend to be cheaper for managed funds than going direct to the provider, but I'd honestly focus more on the cash element and basic pension first (not forgetting the tax relief on your input to a basic pension now)
    The above facts belong to everybody; the opinions belong to me; the distinction is yours to draw...
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