I want to starting investing £100 per mont

cyberla1190

I’m 30 and now recently unemployed due to coronavirus. That is why I am so keen to start investing so I don’t end up penniless in my old age. I just need to find the best option. 

Old_Lifer

I think you need to read about investing before you try it,  otherwise you might end up penniless before your old age.

VXman

I think if you are doing for a pension you'd be better investing in a pension and taking advantage of any tax benefits. 
Have a read....https://www.moneysavingexpert.com/savings/cheap-sipps/

webnibbler

cyberla1190 said:

I’m 30 and now recently unemployed due to coronavirus. That is why I am so keen to start investing so I don’t end up penniless in my old age. I just need to find the best option. 

If it's old age you're worried about you won't go far wrong opening a Vanguard SIPP and putting your money in a LifeStrategy fund, like the 'medium' risk LifeStrategy® 60% Equity Fund 

If and when you get another employer though, switch your contributions to their pension so that you'll benefit from matched contributions.

Don't forget to ensure you first have an emergency fund in place first. 

thrifty_pete

I have given some thought to ISAs versus pensions, and I concluded pensions are better as the gross income (or tax credit on pension contributions) will also hopefully grow with the rest of your investment. So ultimately the pension pot should be bigger than with an ISA. Of course you need to pay tax on your pension at then end, but that won't be anything like 100%.

Alexland

thrifty_pete said:

I have given some thought to ISAs versus pensions, and I concluded pensions are better as the gross income (or tax credit on pension contributions) will also hopefully grow with the rest of your investment. So ultimately the pension pot should be bigger than with an ISA. Of course you need to pay tax on your pension at then end, but that won't be anything like 100%.

But then at age 30 the S&S Lifetime ISA would be the same 25% uplift as basic rate tax relief on a SIPP contribution with no income tax to pay on withdrawal. A workplace pension could be even better. Unfortunately the OP is in limbo and until they can secure a new job won't know what the most efficient way to invest will be for their circumstances.

steampowered

"Low risk" in what sense?

It is absolutely crucial to understand that there are different types of risk. When investing, there are three main types of risk:
- "investment risk" - the risk that the value of shares will go up and down over time, so could go down.
- "inflation risk" - the risk that inflation will outpace the return on your investments.
- "shortfall risk" - the risk that you do not generate sufficient returns for what you need the money for - e.g. you run out of money in retirement.

If you select a "lower risk" type investment fund, you will face lower investment risk, but you will face higher inflation risk.

If you are investing for a 20 year timescale you should be looking at investment funds which are wholly comprised of shares. Something like Vanguard Lifestrategy or HSBC All-Share Index are a great place to start.

The historic average return on investments like that is 7-8% per year, though it does vary over time - some years will be better than that and some years will make a loss.

It is likely that the best way of doing this is via a pension wrapper, as that will get you tax relief. You could also consider doing some of it in a stocks & shares ISA, so that you cam get access to that before retirement age if you need it. The returns you get in a S&S ISA are tax free, but your investment will not get the tax relief which pensions do.

cyberla1190

I feel that the Lifestrategy would be a good option. I am, however, worried they could be expensive in the long run. I need to get this right as my 50-60 year old self will be relying it. 

OldMusicGuy

Why not do a bit of reading before you take the plunge? I (and many others) found this book by John Edwards helpful: "DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing". He also does one on pensions if you need more info on those.

I will add that you need to really think about your attitude to risk and understand it. Yours (like mine was), is far too conservative. The biggest mistake I made 20 years ago was investing in very low risk funds because I was risk averse. If I had been a bit more aggressive and been prepared to ride out the market movements, I would be in a much better position than I am am now. However, it's quite challenging for a risk averse person to come to that understanding. It took me quite a while (this forum was very helpful, as were books like the one I mentioned).

webnibbler

cyberla1190 said:

I feel that the Lifestrategy would be a good option. I am, however, worried they could be expensive in the long run. I need to get this right as my 50-60 year old self will be relying it. 

With the Vanguard SIPP / LifeStrategy combination you're looking at an ongoing charge of 0.37% which makes it one of the cheapest, especially for those starting out. For a broadly diversified, fire-and-forget portfolio it's hard to beat for the average punter.

I would caveat that with an employers pension plan being better in that you will have their matched contributions added.