10 year nest egg

g7tjb

What's the best way to regularly save £50 pm, over 10 years, with no access, to provide a little treat at the end?

Aegis

Depends on your attitude to risk really.

Over 10 years you might want to consider something like a stocks and shares ISA. £50 per month won't diversify much, but in, say, a good UK equity fund you should see a good rate of return over a 10-year period.

If you want something less risky, a cash ISA might be a better bet.

dunstonh

Save or invest?

10 years is a timescale would you normally look to invest rather than save. Which do you prefer?

g7tjb

If it's equities, then there's an element of risk involved. What I'm after is something that I can 'fire and forget'; just pay by direct debit every month, and then in 10 years, I'll hopefully get a £6500 - £7000-ish treat on maturity of the policy. I wouldn't need to keep an eye on the stock market to ensure that 'now's the best time to cash it on' etc.

dunstonh

With the contribution you have in mind, there isnt a problem with equities as you can only have 1 fund, 2 at best.

If you want invest and forget then a fund of funds would be the best option as these invest into 10-20 other funds with the fund manager making the asset allocation/sector allocation decisions for you. However, these are typically more expensive (ranging from only a very little to quite a lot).

Picking an individual fund shouldnt require a lot of ongoing reviews either. Its going to take around 5 years before you really need to look whether its worth doing a fund switch/redirection or not. Any option you do (whether its saving or investing) is going to need a little reviewing.

Jonbvn

I think a S&S ISA would be a good bet, given the term of your investment.

My wife & I invest in S&S ISA's on a monthly basis, through a fund supermarket. This allows you to switch funds etc. Interestingly, I tend to keep tweaking my fund selection, whereas my wife uses the fire & forget strategy. Overall, her strategy seems to be working better (so far).

PauliPauli

Jonbvn wrote: »

I think a S&S ISA would be a good bet, given the term of your investment.

My wife & I invest in S&S ISA's on a monthly basis, through a fund supermarket. This allows you to switch funds etc. Interestingly, I tend to keep tweaking my fund selection, whereas my wife uses the fire & forget strategy. Overall, her strategy seems to be working better (so far).

Which "fund supermarket" do you use please, already have a cash isa fully subscribed this year and wanted to use by remaining £4000 allocation to buy shares, then carry on long term, adding to my seperate "Cash ISA" and "Shares ISA" every April (I assume ISA rules allow this?). thanks

Aegis

PauliPauli wrote: »

Which "fund supermarket" do you use please, already have a cash isa fully subscribed this year and wanted to use by remaining £4000 allocation to buy shares, then carry on long term, adding to my seperate "Cash ISA" and "Shares ISA" every April (I assume ISA rules allow this?). thanks

You certainly can make use of a Stocks and Shares ISA in addition to a Cash ISA each year, although they will have slightly different designations next year.

In terms of fund supermarkets, Hargreaves Lansdown is the one I use, and a lot of people here would recommend it as about the cheapest self-select S&S ISA provider for funds. If you want to deal in shares, they're not fantastic, but their charges for fund dealing are very good indeed.

Just don't go to them if you want a full advice service, as that apparently costs a fair bit!

PauliPauli

I do view my ISA monies as VERY long term investment instead of a pension (suits my circumstances)

So its def an invest and forget approach I'm looking for.

As I currently bank with HSBC, just did some searching and noticed their "ISA capital growth fund" or "ISA Capital protected fund". They have an intro 1% charge fee if done over web?

Aegis

Don't go for a bank's Stocks and Shares ISA, as they'll charge you more than many other providers for less. Look at www.h-l.co.uk, as they're essentially free to enter most funds and have discounted annual management fees too. In addition to that, they have access to an awful lot more funds than HSBC, ones that will perform a lot better!

dunstonh

As I currently bank with HSBC, just did some searching and noticed their "ISA capital growth fund" or "ISA Capital protected fund". They have an intro 1% charge fee if done over web?

Rubbish. Bank funds are generally expensive (for what they offer) and many of them are sub standard.