extra money

mikads

Have recently started working offshore, so my earnings have increased quite dramatically. I will have about 1300- 1400 pounds savings each month and was wondering how best to invest this money to ensure I will have a good retirement fund ( I am 50 ) also as I pay 40% tax onsome of my salary should I put more into the pension fund, I am putting in 7.5% now. Any advice would be gratefully recieved.
Cheers

dunstonh

was wondering how best to invest this money to ensure I will have a good retirement fund

You invest in way that matches your risk profile and experience. If you have to ask the question, then that indicates you are not an experienced investor. You dont appear to want to use an adviser, so that and your inexperience suggests you should avoid experienced investor products and stick with basic products and investments (using experienced investor products/investments can do more damage than good if you dont know what you are doing).

Once you know where and how you want to invest, you pick the provider and type of tax wrapper (inc version of pension) to match what you want.

You need to ask yourself a question. Do you have the ability to invest that amount suitably? Its a very good amount to put aside and needs to be invested with care and knowledge. Going too basic could cost you thousands of pounds in lost returns.

jamesd

I suggest that you read Ok then - How do I choose a S&S ISA to get an idea of what a sector allocation is. Using your stocks and shares allowance is often the best way to start.

Next, read ISAs v Pensions: The Official Retirement Debate for a discussion of the advantages and limitations of pension and ISA investing.

Once you've read that you'll be in a position to decide whether you want to commit to locking up the money in the pension restrictions or not. Or to do this with only part of it - say the part at higher rate.

For the non-pension money after you've used the stocks and shares allowance you can consider holding unit trusts and OEICs outside the ISA and pension and using your captial gains tax allowance of almost 10,000 a year to reduce the tax you'll pay. Dividend payments will count as taxable income so those are best in the ISA while you can hold growth funds outside. Note that accumulation units still pay a distribution that is treated as taxable even though it's reinvested automatically. However, if you're a basic rate tax payer (including after having made pension contributions) and the savings interest and distributions don't take you back over the higher rate threshold there won't be more income tax to pay on these distributions, whether you get them as cash or they are reinvested.

If you do decide to use a professional like an IFA to manage the investments I suggest that you ask for these services at least:

• Initial sector allocation using Watson Wyatt or comparable method.
• Investment selection advice within the sectors.
• Annual rebalancing.
• Advice on fund changes if a fund manager changes.

If you've never done this before it can seem overwhelming initially. You can start out with the ISA and then use that to learn with for a while to see if you're comfortable doing it yourself. If you're not you can then switch to getting advice without having risked to much money.

Don't go into a bank or building society and buy whatever they suggest. They don't have a good range of products and don't give advice from the full range of available products.

purch

Where Offshore are you working ?? and what Tax regime are you subject to ?

mikads

purch wrote: »

Where Offshore are you working ?? and what Tax regime are you subject to ?

Hi, I am working in the North Sea and under the British Tax regime