Alternative to regular savings plan?

Legacy_user

Fairly pointless so deleted.

SonOf

That type of plan went obsolete in the mid 90s.

I was wondering if anyone can suggest what alternatives we could look at?

Stocks & shares ISA was mostly took over.

and are quite averse to risk

What risks? I guess you mean investment risk but if you dont take sufficient investment risk you leave yourself with inflation risk and shortfall risk.

iglad

stick it into a global tracker and she'll be fine.

SonOf

iglad wrote: »

stick it into a global tracker and she'll be fine.

Ignore the above. Totally inconsistent with risk.

System

Pointless so deleted

Zero_Sum

GrrArrgh wrote: »

Sorry, what I mean is we don't want to risk losing money from the investment. The product we have at the moment guarantees you get back what you put in but not that you will make any money. We just want somewhere that will lock a small amount of money away each month over a long period so we don't spend it!

Over what time frame?
You could just open a regular savers account. Most banks offer them.
Then on maturity can either spend it on something or lock it away for a longer period, usuall 1,2,3 or 5 years.

AnotherJoe

If you get back what you put in then that means you've lost money. I take it you've heard of inflation?
It's a trade off of different types of risk and what yiu are asking for simply isn't possible
If you invested in the stock market for ten years you are pretty much guaranteed to do well however £20 a month is low for that and most regular cash savers with say 3% end after a year and you need to restart so the actual rate will be less than 3%.
So it may be that with your poor understanding of risk you are stuck with poor plans like what youve got.

You've probably seen the headlines about possible recession etc and it may seem backwards to you but now would actually be a good time to start investing regularly because you'd be buying shares as they fell so you'd get back more when they rise.
But if you can't stomach that then the current plan you are in is probably the best you can get, they make their money by exploiting people that don't understand "risk" isn't a simple scale but a selection of different types you have to balance between.

DoctorStrange

You could try premium bonds? You're guaranteed not to lose money in simple terms and it's a wee bit of fun.

For £20 a month I wouldn't be worrying about risk too much and, if you really can't trust yourselves not too withdraw it, I'd maybe even consider not saving it at all and just treating yourselves to small things every now and again.

sendu

Other posters have mentioned it, but since you may never have thought about the real effects that inflation has, I'll give you some details.

Inflation has been about 2.9%/yr the past 10 years, cumulative ~33% price change. Meaning something that cost £20 10 years ago probably now costs about £26.60.

Or to put it another way, if your 2009 self wanted to be able to buy £20 worth of goods or services in 2019, you would needed to have invested in something that returned at least 2.9%/yr. Anything less than that, and you lost money (wouldn't be able to buy as many loafs of bread in 2019 as you could in 2009).

Police mutual only guarantees that this is the most amount of money you'll lose, but you could still be losing money in this way. Their estimates today are that if things go pretty well, you'll make ~2.3%/yr, and if things go very well you might make 4.4%/yr.

These low estimates are presumably based on their high ongoing fees of about 2%/yr.

Doing your own investment in something similar to what the Police mutual fund is probably invested in, but without those fees, already gets you most of the way toward beating inflation.

For reference, a conservative low volatility fund with low fees had ~7%/yr returns in the last 5 years.

System

Fairly pointless so deleted.

DrSyn

GrrArrgh wrote: »

Sorry, what I mean is we don't want to risk losing money from the investment. The product we have at the moment guarantees you get back what you put in but not that you will make any money. We just want somewhere that will lock a small amount of money away each month over a long period so we don't spend it!

There is always risk with money, its just the type and size of risk which changes.

In the mid 1970's inflation was over 25%. So your savings effectively shrank by 25% in purchasing power.

Just putting money into a bank or building society account savings account protected by the FSCS means you will be loosing purchasing power if your interest rate is less than inflation.

Ask your wife will £20 today buy the same amount of food as £20 ten years ago.

The point of taking investment risk is you hope at least to match inflation. There are however no guarantees.

What you might do with your £20 per month and still have the money at the end.

Buy Premium Bonds
or do this:-
https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/

If after talking things over with your wife you do think of taking some investment risk come back here for some suggestions on what you might invest in.