If you are saving over a long period, and want to get the best possible growth, you may want to consider investing your money. However, remember that with many types of investment, you have to give notice before getting access to the money that you have saved.
Individual Savings Accounts (ISAs)
Why do I want one?
Tax free interest and capital gains. There is no minimum 'lock in' period. You may cash in your ISA at any time. An ISA may include any combination of cash, stocks and shares, unit trusts, life assurance and National Savings.
You may only invest up to £7,000 per year out of which up to £3,000 may be in the form of cash deposits (i.e. in a bank or building society account).
How do I find out more?
You will need to search the market place for the best offers. Many newspapers give tips for the best accounts. Many Internet sites give details and package ISA accounts for you.
The government encourages people to provide for their retirement by giving tax incentives to the premiums paid.
Why do I need one?
The state pension is likely to fall behind real needs over the coming years. You need to have a private pension scheme to enjoy a satisfying retirement. The premiums attract full tax relief at the top marginal rate of income tax to which the person paying the premium is liable.
They are locked up until you retire – the earliest age is 50.
How do I find out more information?
An independent financial advisor can help you get the best pension to suit your needs and your pocket. See www.unbiased.co.uk.
National Savings Certificates
They are guaranteed by the government and give guaranteed returns.
They do not give interest every year, only when the certificates mature.
Via the National Savings web site or application forms at post offices.
These are schemes designed to encourage employee loyalty. The schemes reward employees when, as a result of their work, the company performs well. They allow employees to save regularly and buy shares in the company at a discounted rate.
Why do I need one?
These schemes encourage you to work hard for the benefit of your company and for your own benefit. The gains on the shares are free from tax. The cost of the shares is discounted.
Any disadvantages ?
Shares can be risky investments as the value of the shares could fall below the price paid.
Where can I find out more information?
Ask your employer if they have such a scheme.
Try the FSA's Financial Health Check, and find out tips for a healthier financial lifestyle - now and in the future.
In debt and need help?
Call a CCCS counsellor at 0800 138 1111