Small Scale Regular Savings

Bliss88

Hi All,

Sorry if the information for this is elsewhere. I have had a look but nothing is obvious.

I am looking to invest around £25 a month into an investment fund. I will be paying in indefinitely but want option of stopping payments at any point if my circumstances change. I don't mind longer (5yr+) maturity/funds locked in.

I would like a higher level of return and don't mind a level of risk. I would prefer a green/ethical fund but this isn't a deal breaker.

Any recommendations?

Thanks

ValiantSon

I'm not clear if you are looking at investments (in stocks and shares) or savings.

If the former then you need to be aware that a timescale of 5 years is quite short, and a minimum of 10 years would be more advisable.

At £25 per month you won't meet the regular funding requirements for some platforms, but you will for others. However, you could always save the money up to meet the minimum initial deposits and then you could make regular investments of whatever value you wanted.

How high a risk? If the value of your investments fell by 50% in a single year would you be okay with that because you would allow them time to recover?

jimjames

For those sorts of sums some investment trusts offer schemes. You could also do a S&S ISA with HL at £25 per month and then choose which fund to buy in it. There are various ones that meet different risk categories so it depends what your tolerance is

Bliss88

Thanks ValiantSon.

I am not too fussed regarding whether it is savings or investments. I don't want to invest in a single company (e.g. direct purchase of equity shares) because I know that the size of investment is too small and I am not interested in anything which could be classed as gambling more than investment (e.g bitcoin). Any type of tracker funds or portfolio containing debt is fine.

I can go to £50 a month if that would open more doors. I was only using the figure of 5 years to mean I didn't require the money next week. 10 is fine.

Although I wouldn't be happy with a 50% loss I understand risk and reward and would be prepared to accept that. Particularly as a regular invester would mean I am also buying at the new lower price.

aj23_2

There's no point using a Regular Saver if you're looking at saving £25-£50 a month, when most are only for 12 months. Even if you deposit £200-£250, someone like Virgin Money will only return £37 on it. And some won't let you deposit less than £50.

I'd pay it into a pension if you have one already, as that is investing in funds which make you a return which you won't get on the high street banks. Or a Lifetime ISA if you're under 40.

I think you mean investing regularly, not regularly saving..

charolettepope

Why don't you try investing in Mutual Funds. Mutual funds are basically where experts will take your money and invest in various businesses and make more money out of it. Then give you a share. I could not share the links here, you could google search. There are some articles on Telegraph.

forextc

A quite good and cheap savings scheme is offered by Baillie Gifford if you can stretch to £30 per month.

They offer two good generalist investment trusts:

- The Scottish Mortgage Trust
- The Monks Investment Trust.

Both investment a diversified portfolio of global shares and have a good history of performance.

As they are share based investments they are not without risks. You should really be taking a minimum 5 investment time horizon.

It would be worth checking out their website for more information. You can stop and start your payments online without penalty and make additional ad hoc contributions if you want to.

atush

Small Scale Regular Savings

That is the way people begin/learn to save. No one really starts out investing large sums, unless you inherit or wint the lottery. Reg monthly savings are the normal way to invest.

Apart from pensions, which you should address first, then using a S&S isa, esp an investment trust based one, could be somewhere to look. When i began to invest, I didnt have a lot of extra cash. So did invest 25/m in a few of these (Witan, F&C and invesco Perpetual inc and grw to be precise). And thus began my investing career (with a little side turn into stocks as well with the CB).

Alexland

forextc wrote: »

A quite good and cheap savings scheme is offered by Baillie Gifford if you can stretch to £30 per month.

They offer two good generalist investment trusts:

- The Scottish Mortgage Trust
- The Monks Investment Trust.

Both investment a diversified portfolio of global shares and have a good history of performance.

As they are share based investments they are not without risks. You should really be taking a minimum 5 investment time horizon.

It would be worth checking out their website for more information. You can stop and start your payments online without penalty and make additional ad hoc contributions if you want to.

A few days ago we setup a BG Children's Savings Plan for my 2yr old son at £50 per month into Monks. I like the replacement Monks team who have managed the BG Global Alpha fund for over 10 years. We chose to open it in my wife's name rather than bare trust so we retain control of the money and can withdraw at any time. Monks is aiming for growth so pays a low dividend so from a tax perspective, if it does really well, then we just need to be careful on capital gains at the end. With no account or trade costs and only a small withdrawal cost at the end it's a lot cheaper than buying these ITs via an ISA wrapper.

Alex

forextc

A few days ago we setup a BG Children's Savings Plan for my 2yr old son at £50 per month into Monks. I like the replacement Monks team who have managed the BG Global Alpha fund for over 10 years. We chose to open it in my wife's name rather than bare trust so we retain control of the money and can withdraw at any time. Monks is aiming for growth so pays a low dividend so from a tax perspective, if it does really well, then we just need to be careful on capital gains at the end. With no account or trade costs and only a small withdrawal cost at the end it's a lot cheaper than buying these ITs via an ISA wrapper.

Alex

Hi Alex,

We seem to be following each other around the boards this evening!

I should echo that I have held Scottish Mortgage and their Japan funds for a number of years and still do.

Unfortunately most of the other low cost Investment Trust savings plans seem to have gone now - apparently administrative expenses and consolidation are to blame. I think other than the Baillie Gifford and JP Morgan there are few cheap plans left.

A shame as they were a cheap way to build up sizeable sums with regular investments.

ValiantSon

Bliss88 wrote: »

Thanks ValiantSon.

I am not too fussed regarding whether it is savings or investments. I don't want to invest in a single company (e.g. direct purchase of equity shares) because I know that the size of investment is too small and I am not interested in anything which could be classed as gambling more than investment (e.g bitcoin). Any type of tracker funds or portfolio containing debt is fine.

I can go to £50 a month if that would open more doors. I was only using the figure of 5 years to mean I didn't require the money next week. 10 is fine.

Although I wouldn't be happy with a 50% loss I understand risk and reward and would be prepared to accept that. Particularly as a regular invester would mean I am also buying at the new lower price.

I'd suggest looking at multi-asset funds like Vanguard LifeStrategy, HSBC Global Balanced, L& Multi Index, or Blackrock Consensus. Search on https://www.trustnet.com/ to find out a bit more about them.

Once you have selected a fund you can look at the platform that you wish to hold it on. Use this table to compare the various costs: http://monevator.com/compare-uk-cheapest-online-brokers/