Is there a ‘Roth IRA’ (tax free, compound interest) equivalent in the UK?

leepwbriggs

Hello,
I’m looking for some advice on how best to invest a bit of money each month. I’m not as clued up as I should be when it comes to money but I know I need to be investing something.
I am relatively young and want to start saving £100 a month; I would like to increase my monthly payments over time as I start to earn more. I don’t need access to this money, at least not for the next 20 years, and would like for it to just sit somewhere and grow.
I have read that “The key to wealth is compound interest. Invest just £100 every month when you’re 25 and at a 10% return, you’ll have £600,000 by the age of 65.”
Any advice would be appreciated.
Cheers,
~Lee

Aegis

Well, cash ISAs are tax free and pay compound interest, but nowhere near the 10% level!

To achieve 10% you'd probably need to be looking at stock market investments, which could definitely work out for you if you plan to save £100 per month for the very long term. However, you must ensure that you have sufficient savings for short term needs as well.

purch

There is not direct equivalent to the Roth or Keogh IRA's

If you stuck £100 quid into an Cash ISA for 40 years at current rates and compounded the interest you'll probably get nearer £ 200,000 by the end