If you’ve got children, it’s natural to want to plan ahead for their future – to help them pay for education, their first home, a gap year, or other major expenses. Until recently, Child Trust Funds were one of the most widely-publicised options. Launched by the Government in 2002, families received up to £500 in public money to invest per child. However, this programme was scrapped in 2011 with the cost of the Government contribution proving too heavy.
Modelled on their better-known adult counterparts, Junior ISAs were launched in November 2011. Currently, parents, grandparents, relatives and friends can deposit up to £3,720 a year in a junior cash ISA, a junior investment ISA, or a mixture of the two. All growth and interest earned is tax-free.
Timing an annuity purchase can be a difficult decision – buy now and you could risk missing out on rising rates; delay and you could end up with a worse rate in the future. There seem to be mixed signals in the annuities world at the moment, leaving many older people with a dilemma – should they buy now or wait and see what happens?
There are encouraging signs that annuity rates are starting to rise – a welcome development for older people who have saved for years for their retirement.
Annuities are purchased in order to turn pension savings into annual retirement income – and they hit a record low point last summer. However, several of the major annuity providers have increased their offers in recent times. Annuity rates tend to move up or down in line with the interest paid by the Government on the bonds it sells to investors. This interest rate is called the gilt yield, and annuity rates reflect the yield on certain types of gilts.
Investec have recently launched their most recent income plan offering 6.12% pa. We take a look at a fixed income investment which by combining a high level of monthly income with conditional capital protection, is proving to be a very competitive option in these challenging times.
Income needs greater than ever before
Income continues to be the most consistent of all the investment themes, whether you are working and need to supplement your earnings or retired and looking to add to your pension income. With record low interest rates looking here to stay and the real threat of inflationary pressure rising the income demands on our capital have never been greater.