newbie- help endowments

anderson5

Hello,


I am looking to star an endowment like my parents did. Over 5/10 and 25 years however is there ones which aren't tied into stocks and shares?
Or is there anything else out there I could start. I don't have money to invest this is just the beginnings of savings.


Ive also got life insurance though another company so this would only be an endowment purely on its own.


Can anyone help me?


Thanks

kingstreet

No longer available.

Use an ISA as you get tax efficiency and lower charges.

pathtofreedom

Endowments aren't really used any more as so many people didn't get the returns they were expecting.

What are you wanting to use these savings for? How much can you afford to put away each month? Are you a hrt payer or likely to be in the future?

anderson5

Im only 25, For the future, save for a deposit for a house/ if we have family/ just for things in future that we may need.
Looking to put away £20 a month?


Completely new to all of this not sure what an hrt payer is? so sorry!
want to be able to have ones mature at different years as such.


Any help?


Thanks

kingstreet

An endowment bundled savings and life cover.

Charges were high, tax efficiency poor. That's why they no longer exist as a mass market product.

An ISA provides the tax efficiency and reduces the charges. There is also no unnecessary life cover.

kingstreet

An ISA does not have a term. You pay into it as long as you want. If investing in stocks and shares, the longer the better.

The return on your invested money - your profit, or interest, is usually taxable but in an ISA you don't pay tax on the money you make.

pathtofreedom

If you only have £20 a month to start with you probably want to look at the current accounts with high interest rates or an isa as others have mentioned.

Hrt means higher rate tax, so earning over 42k from april. With only 20 to spare though I'm guessing you're a way off from that.

If you're wanting something to stop you being able to get at the money and spend it maybe an isa or savings account is better for you than a current account, but some of these lock you in where if / when interest rates start to go up you might regret that 3-5 year lock in when you could have moved your money somewhere else.

Maybe just start off getting used to saving regually, if it is for a house though you'll need to be putting away a lot more than 20 as that is only £240 a year and that wouldn't even cover the solicitor costs let alone a deposit.

If you look on the debt wannbe section and post an SOA (list of your income / outgoings there are tempates) and see if people can help you maximise your income to save more. I use some software called ynab which i can update on my phone which has helped me save a lot more in the past year by improving my budget. Even if you just watch their webinars and do the 30 day trial this might help you see ways to save more.

Good luck with your plans.

magpiecottage

The other problem with endowments is they are very inflexible. You have to run them for the full term (at least ten years) or the returns could be particularly poor.

If you are saving for a home, presumably you would prefer to buy before you are 35 if at all possible. You may find you can get a bonus for regular savings and, if the company you are with proves to be poor, you can up sticks and move your money - again something not possible with an endowment policy.