A few questions

crazychamps

HI all, I've been reading this forum for a few weeks now and have a few questions.

First off I'm a student and in my early 20s so I don't have any constant salary income for the next 18 months. However I have an emergenc fund of x0,000 sitting in an ISA gaining 1.5% which I have never used and likely/hopefully will never use. Also I have 0 debts.

Since the emergency fund is covered and other funds will be dealt with seperately, I have come to the calculation that I will have around £300-£500 left over for savings/investment.

Now I am currently researching about investments in order to know what I need to do.

1. Are there any books which are good for beginners and advanced investments?
2. What are appropriate estimations of investment returns over a 10-20 year period?
3. If I contribute money to a pension. Will it accrue interest? Also if I decide to go back to university a few years afterwards, can I wait till the new tax year and reclaim all my contributions (Including my employer's contribution?) at the basic tax payer rate? Because it is likely that I will be paying taxes at 40% when I begin working. If the pension is below 10k, will I be able to claim it back interest free?

4. The 123 santander account and lloyds 5% account mention that £500 must go into them every month. Can I do the following:
Begin with two lloyds having £2000 in them and have say £10,000 in santander and each month deposit £500 into the santander then a few days later transfer it out to one of the lloyds accouns ... then rinse and repeat each month? Or must the value of each account increase by £500 each month minus the direct debits that are removed monthly?

EDIT: 5. is the NISA only available for the 2014/2015 or is the new yearly rate after July 2014 going to be an allowance of £15,000?

cinek

check out smarter investing by Tim Hale
here's the review: http://monevator.com/review-smarter-investing-by-tim-hale/

greenglide

crazychamps wrote: »

4. The 123 santander account and lloyds 5% account mention that £500 must go into them every month. Can I do the following:
Begin with two lloyds having £2000 in them and have say £10,000 in santander and each month deposit £500 into the santander then a few days later transfer it out to one of the lloyds accouns ... then rinse and repeat each month? Or must the value of each account increase by £500 each month minus the direct debits that are removed monthly

I have wondered that!

I would imagine that as long as the money coming in comes from a different bank (so they cannot see the details) then it should be OK as long as the small print doesn't specify what the source of funds is - there is a big difference between "salary paid in" and internet banking from another account.

They also may require that you "use" the account - more than just £500 in, £500 out to the next account.

Worth a go though!

jimjames

crazychamps wrote: »

4. each month deposit £500 into the santander then a few days later transfer it out to one of the lloyds accouns ... then rinse and repeat each month?

EDIT: 5. is the NISA only available for the 2014/2015 or is the new yearly rate after July 2014 going to be an allowance of £15,000?

4. Yes you can do this. You can transfer money back out again the same day, it doesn't even have to be in the account overnight so can earn full interest in the original location.

5. It is the new rate subject to any future budget changes.

crazychamps wrote: »

3. If I contribute money to a pension. Will it accrue interest? Also if I decide to go back to university a few years afterwards, can I wait till the new tax year and reclaim all my contributions (Including my employer's contribution?) at the basic tax payer rate? Because it is likely that I will be paying taxes at 40% when I begin working. If the pension is below 10k, will I be able to claim it back interest free?

Pensions don't normally accrue interest. They are generally used for investments which will be subject to capital gains (or losses) and dividend income.

You can claim tax relief on pension payments but except in certain specific situations cannot reclaim your contributions - doing so isn't a good idea anyway as leaving them invested long term should be a better option so they grow for a longer period of time.

Wise_Investor_2

Cotter on Investing is a good book. Have a look at Harriman House's website, they publish a lot of practical reads. And as always, check websites like Telegraph investing and This is Money as well as this one too for some good tips.