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Q & A: Investing for the future By Hannah Ricci
I am in my mid-thirties and have a small disposable monthly income, but I've recently been thinking about my future and when I retire. My partner and I don't own our own home (we don't have any savings or assets LY/Glasgow Adviser: Francis Klonowski, principle at Klonowski & Co, Leeds There are several questions you need to ask yourself before you invest anything. How much would you need for a deposit on your proposed property? Can you accept some risk on your longer-term savings? And, above all, how much are you prepared to set aside each month? Once these are clarified, you know what you are aiming for and it is easier to identify the best ways of saving. Subject to the answers, however, I would suggest a three-way split of the money you want to invest: short-term savings for about 50% of the amount and the rest divided between longer-term investments. Building up savings first and then doing the longer-term investments, as many do, is not a good idea. Next, you need to make the most of your tax-free opportunities. You can save up to £3,000 each tax year in a cash ISA (up to £3,600 from next April). You will need access to some money in an emergency, so opt for an instant access account. Longer-term investments could go into stocks and shares ISAs, where you can currently save up to £4,000 each tax year. Begin with a global fund to give a wide spread of investments - it is possible to save from £50 a month, although £100 gives you a wider choice of funds to choose from. The remainder should go into a pension plan, which mustn't be forgotten in the rush to concentrate on more immediate needs. Choose a low-cost stakeholder plan, perhaps with a tracker fund to begin with - this is a good way of building up a fund while keeping charges down.
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