GreenReaper (greenreaper) wrote,
GreenReaper
greenreaper

  • Mood:

Investing for those in the UK

I know that several of my friends are in the UK and can't use all of my previous suggestions, so I had a quick look for some good options for you as well:

* The simplest solution to reasonably sure, reasonably good long-term retirement success is a good index fund, like Fidelity's. Despite what I said about not beating the market, understand that good index funds do beat the majority of most actively managed funds - around 85%, in fact. The most important thing is costs, so keep the expense ratio low - certainly below 0.40%, ideally more like 0.25%. If you do not consider yourself qualified to pick anything and don't want to learn, this sort of fund is a good bet. Be aware that it will go up lots, and go down lots, and you should probably not pay too much attention to either.
* For those who need to make reasonably sure a high proportion of their money stays safe (if you're less than 50, this is probably not you), something in bonds (Fidelity offers a good choice again). Consider having some in stocks as well.
* If you are making a lot of money, consider a Direct ISA from the government (I don't recommend the premium bonds, they're fun to win but offer a less than stellar rate of 3.15%).
* Any number of UK e-Savings accounts offer good rates. You should expect to see around 5%. Your local bank may offer one, too but be aware that you are probably paying for them having that big bank there with a lower interest rate. Remember that interest will be charged against whatever your tax bracket is, and this may erode your savings.

If you are UK resident for tax purposes, you should put most of these investments in an ISA (fact sheet - BBC overview) to avoid paying tax on capital gains, dividends or income. An ISA is roughly equivalent to a Roth IRA in the US - you only add funds that you already paid tax on to it, so you do not need to report it as taxable income when you withdraw funds from it. You can either invest up to £7,000 each year in stocks/bonds, or up to £4,000 in stocks/bonds and £3,000 in cash.

I don't know a lot about the UK market, but the above should be safe enough advice. You are unlikely to do truly badly from any of them, and none of them should take significant effort to setup or maintain, leaving you to get on with life. :-)

If you want to learn more, try starting your exploration from thisismoney, trustnet, MSN Money UK or bestinvest.
Tags: investing, money
Subscribe
  • Post a new comment

    Error

    default userpic

    Your reply will be screened

    Your IP address will be recorded 

    When you submit the form an invisible reCAPTCHA check will be performed.
    You must follow the Privacy Policy and Google Terms of use.
  • 0 comments