money builder 15years

angelheart

Hi all

I have been looking for a long term saving account, probably over 15 - 20years. I can save about 75.00 - 100.00 at the moment and increase over the next 5 years probably about 10 - 20 per year. I am 42 years old (not sure if that is relevant)

I have received some information from scottish friendly or would I be best just saving in a buildng society.

As you can probably gather, I am a total novice this and really appreciate some advice

thanks

:A:A:A

Hominu

For a 20 year savings plan I would prefer investments over the building society and build up a portfolio of companies, but that might be outside your comfort zone.

If you want a zero risk strategy, then you'll have the chase the interest rates with the rest of us, constantly swapping and changing as interest rates nose dive and other better offers surface.

xylophone

Do you have a pension?

paulineb_2

Ive saved with them before, did a 25 quid a month tax free savings, have an isa with them, have another 25 quid one just now as the last one matured. For me, it was about saving money that I could easily have frittered away and even though the bonuses arent what they were, I would think still better than just leaving your money sitting in a bank.

angelheart

thanks everyone.
I have a NHS pension that is going to be frozen as we are transferring to a new company

bigfreddiel

angelheart wrote: »

I have received some information from scottish friendly or would I be best just saving in a buildng society.

I am a total novice this and really appreciate some advice

scottish friendly - dont waste your time -

building society - rates are at an all time low and do not beat inflation

over 20 years you must invest and in your case drip feeding £100/month is excellent

open an equity isa with a funds supermarket for example H&L, TDDirectinvesting, Bestinvest

a ready made balanced portolio based fund like vanguard's lifestrategy 60% ACC fund would be ideal - could show 10% gain per year - doesn't sound much but componded over 0 years it will soon grow

just check that whoever you pick to handle your fund(s) offers the vanguard funds - not all do. TDDirectinvesting and bestinvest do, but check firt

btw the 60% means 60% equities and 40% bonds - bonds are like a savings account so provide a bit of stability to counteract fluctuating equity values - and ACC means it re-invests dividends ie earns more interest - an INC fund will payout the interest also known as income,You can re-invest the income yourself tho; and in an isa there is no warry about capital gains and so on.

cheers

fj

Robie

bigfreddiel wrote: »

scottish friendly - dont waste your time -

building society - rates are at an all time low and do not beat inflation

over 20 years you must invest and in your case drip feeding £100/month is excellent

open an equity isa with a funds supermarket for example H&L, TDDirectinvesting, Bestinvest

a ready made balanced portolio based fund like vanguard's lifestrategy 60% ACC fund would be ideal - could show 10% gain per year - doesn't sound much but componded over 0 years it will soon grow

just check that whoever you pick to handle your fund(s) offers the vanguard funds - not all do. TDDirectinvesting and bestinvest do, but check firt

btw the 60% means 60% equities and 40% bonds - bonds are like a savings account so provide a bit of stability to counteract fluctuating equity values - and ACC means it re-invests dividends ie earns more interest - an INC fund will payout the interest also known as income,You can re-invest the income yourself tho; and in an isa there is no warry about capital gains and so on.

cheers

fj

Well put bigfreddiel. Answered the question beautifully. Sometimes, simple explanation is all that is required.

marathonic

One bit of wisdom from me: increase your contributions by at least 5% per year to keep up with, and exceed, inflation.

Don't just wait until you can afford to rise them from, for example, £100/month to £150/month. You could end up seeing yourself still contributing £100/month in 10 years time if that were the case.

Whilst a £5/month rise in conributions next year might seem like very little and not worthwhile, it makes a huge difference over the long-term.

kidmugsy

angelheart wrote: »

Hi all

I have been looking for a long term saving account, probably over 15 - 20years. I can save about 75.00 - 100.00 at the moment

If you mean £100 per month, then I'd suggest that first you get yourself a decent emergency fund - people often recommend that it contain six months' outgoings. The best way to do this is to use a Cash ISA where the money is on instant access. You'd choose on the basis of interest rate and convenience for you.

Once that's done, you have to look at investing in shares, directly or indirectly. There seem to me to be two potentially attractive alternatives for someone who isn't very confident about investing in shares. One is freddie's: that's a pretty good scheme, with low costs.

The other is to go for a With Profits fund at a mutual: they can look expensive but since the policyholders are also the equivalent of the shareholders, the net effect may not be too bad. Scottish Friendly is perfectly respectable, but the only investment that we've had with them had disappointing results - not disastrous, but somewhat disappointing. In the link below some Societies are mentioned that have good records. Mind you, I wouldn't use an endowment to access their With Profits funds - much too inflexible; we use a couple of the Stocks and Shares ISAs that some of them offer.
http://www.ftadviser.com/2013/03/28/insurance/life-assurance/with-profits-endowments-annual-results-mJbACLxie9bEazx04FFijN/article-2.html

Many Friendly Societies offer benefits of membership beyond just the investment: it might be worth your while to visit their websites to see what's on offer.