FEAR OF FINANCE

Click to follow
If your last investment venture left you clutching a mighty hangover then now may be the time to move into something more liquid and more tasty: wine. A Chateaux PEP could be far more fun than getting giddy over gilts and bonds.

Wine is negotiable currency worldwide and you don't need to be an oenologist to appreciate why splashing out some money for a case or two might not be such a bad thing. For the private wine buyer there is no income tax or capital gains tax to be paid on the profit and your liability is only on the purchase price, not on market value.

The weather is one of the main reasons why wine could be a wise money maker at the moment. During the 1980s the weather was kind to the vines and the decade produced four top vintages, pushing market values down. But since the start of the 1990s the weather has been poor, forcing prices of the good vintages up again.

The market is bullish and prices are looking up. To the end of March the wine market rose 11.4 per cent and some French reds even doubled in price in 1994. According to Michael Davey chairman of Croxtons, which runs a managed Bordeaux wine investment plan, if you spent pounds 10,000 on some good quality wine in 1975, that investment could now reap you around pounds 150,000. In the last two years the company has sold pounds 40m worth of wine through its Bordeaux wine investment plan.

If this sounds too good to be true, there are rules to follow and risks to note. Investing in wine is speculative, rather like property or fine art. But compare a pounds 10,000 wine investment with the same investment in shares between 1975 and 1995. With wine you would realise an average of around pounds 102,630; in Chinese porcelain, considered the next best for returns, you would net pounds 93,390. At the bottom of the market, diamonds, certainly not a girl's best friend at the moment, would only return you pounds 18,500.

This is not about a Chianti, or a clever little fruity white at pounds 4.99, so if you know what you like to drink but are not an expert choose an adviser carefully - a good track record is no guarantee of future success. A decent investment demands top vintages of a particular type. The top 25 Bordeaux chateaux are most popular as they are easily identifiable and carry price records over 200 years.

As an investor there are two things you need to decide: how much to invest and for how long. A wine portfolio should be a mature investment. A good 1990 wine would not be drinkable until 2003. For the short term, such as five years, you need to balance your choice of wine according to how much you can make and what it is you might want to drink. The minimum worthwhile punt would be around pounds 5,000, although you could go as low as pounds 2,500.

With Caxtons managed wine investment plan there is no annual management fee and once you have bought your wine, you will receive regular price updates on the wines you hold.

What you don't do is buy the wine and stick it your cellar, occasionally lifting out a bottle or two to check if it's OK. Your investment will be shipped off to a bonded warehouse for which you will pay 1.5-2 per cent a year to cover insurance and housing. The warehouse sends you a certificate of what is being held.

Any market which is prey to the vagaries of the weather needs to be approached with extreme caution, which is why wines from Bordeaux are the usual currency. Bordeaux is traditionally France's classiest wine-producing area.

You need to bear in mind that there is no quality control for wine but a Bordeaux Index run by Decanter magazine will allow you to monitor your investment. This currently stands at 674.02 having opened at 100 in August 1978 and reflects a great cross-section of Bordeaux wines.

You also need to note that as you actually own the wine it is not covered by the Financial Services Act and there is no compensation fund. Neither is wine as easy to sell as it is to buy, but wise initial selection should reap dividends.

Best borrowing rates

MORTGAGES

Telephone % Rate and Max Fee Incentive period adv %

Fixed rates

Hinckley & Rugby 0800 774499 1.50 to 1/6/96 70 pounds 250 -

HMC 01494 459100 4.99 to 1/8/97 75 pounds 295 Discount vouchers

Coventry 0800 126125 5.35 to 1/5/97 95 pounds 250 -

Lambeth 0171 737 2925 6.65 to 1/5/98 95 pounds 250 0.75% Cashback

NatWest Local branch 7.99 to 31/8/00 90 pounds 250 pounds 400 Cashback

TSB Local branch 8.84 to 30/6/05 95 pounds 250 Free valuation

Variable rates

Nottingham Imperial 0500 340566 2.00 for 12 mths 90 - -

Staffordshire 01902 772611 4.49 to 1/3/97 50 - -

Greenwich 0181 858 6781 5.95 for 3 yrs 95 - pounds 500 cashback FTB

Coventry 0800 126125 6.65 to 1/10/99 95 - pounds 300 cashback

PERSONAL LOANS

Telephone APR Fixed monthly payments pounds 3,000 over 3 years

Unsecured with insurance no insurance

Midland Bank Local branch 15.40 pounds 116.54 pounds 103.14

N&P 0800 808080 15.50 pounds 118.22 pounds 103.29

Yorkshire Bank 0113 231 5324 15.50 pounds 119.34 pounds 103.34

Secured Max adv % Max term

Royal B of Scotland 0800 121121 10.90 70 3 years - retirem't

Midland Bank Local branch 11.40 80 5 to 30 years

First Direct 0800 242424 10.30 80 Up to 40 years

TYPICAL OVERDRAFTS

Telephone Authorised EAR % Unauthorised EAR %

Barclays Local Branch 19.20 29.80

Lloyds Local Branch 19.40 26.80

NatWest Local Branch 18. 90 33.25

BEST OVERDRAFTS

Telephone Authorised EAR % Unauthorised EAR %

Woolwich 0800 400900 9.50 29.50

Alliance & Leicester 0500 959595 9.50 29.80

Abbey National 0800 555100 9.90 29.50

CREDIT CARDS

Telephone Card Min Rate APR Annual income pm % % fee

Standard

R Fleming (S&P) 0800 282101 MasterCard/Visa - 1.00 14.60 pounds 12

R Bank of Scotland 0800 161616 MasterCard - 1.14 14.50 -

TSB Local branch MasterCard/Visa - 1.38 17.90 -

Gold cards

Lloyds Bank Local branch MasterCard pounds 20,000 1.15 16.50 pounds 40

Midland Bank Local branch Visa pounds 20,000 1.30 18.10 pounds 35

MBNA International 0800 062620 MasterCard/Visa pounds 20,000 1.45 18.90 -

STORE CARDS

Telephone Payment by direct debit Other methods

% pm APR % pm APR

John Lewis Local store - - 1.39 18.00

Marks and Spencer 01244 681681 1.90 25.30 2.00 26.80

Burtons Local store 1.97 26.30 2.21 29.90

Best savings rates

INSTANT ACCESS

Yorkshire BS 0800 378836 1st Cl Access Postal pounds 1,000 6.05 Year

Skipton 01756 700511 3 High Street Instant pounds 15,000 6.50 Year

Northern Rock 0500 505000 Go Direct Postal pounds 20,000 6.75 Year

Bristol & West 0800 303330 Asset Instant Postal pounds 50,000 6.80 Year

NOTICE ACCOUNTS

Gainsborough 01427 611011 Capital Share 30 day pounds 500 5.55 Year

Scarborough 01723 368155 Scarborough 50 50 day P pounds 1,000 6.60 Year

Coventry 0345 665522 Postal 50 50 day P pounds 40,000 7.40 Year

Northern Rock 0500 505000 Postal 90 90 day P pounds 10,000 7.30 Year

TERM ACCOUNTS

Portman 01202 292444 Fixed Int Bond 1 year pounds 500 7.00 F Year

Newcastle 0191 232 6676 Nova Star 1 year pounds 1,000 7.10 Year

Woolwich 0800 400900 Fixed Rate Bond 2 year pounds 500 7.50 F Year

Halifax 01422 333333 Guaranteed Res 3 year pounds 10,000 7.90 F Year

MONTHLY INTEREST

Birmingham Mid 0645 720721 First Class Postal pounds 1,000 4.79 Month

Britannia 01538 392808 Capital Trust Postal pounds 2,000 5.84 Month

Northern Rock 0500 505000 Current Acc Gold Postal pounds 10,000 6.08 Month

pounds 25,000 6.31 Month

TESSAS (tax-exempt special savings accounts)

Sun Banking 01438 744500 5 year pounds 8,400 8.00 F Year

Market Harboro' 01858 463244 5 year pounds 9,000 7.75 Year

Hinckley & Rugby 0800 774499 5 year pounds 5,000 7.65 Year

Barclays 0800 400100 5 year pounds 1,000 7.50 F18 Year

HIGH-INTEREST CHEQUE ACCOUNTS

Woolwich 0800 400900 Current Instant pounds 500 3.70 Year

Halifax 01422 333333 Asset Reserve Instant pounds 5,000 5.00 3 Mths

Chelsea BS 0800 717515 Classic Postal Instant pounds 2,500 5.50 Year

Northern Rock 0500 505000 Current Acc Gold Postal pounds 50,000 6.50 Monthly

OFFSHORE (gross)

Portman CI 01481 822747 Instant Gold Instant pounds 5,000 6.20 Year

Derbyshire IoM 01624 663432 Instant Access Instant pounds 25,000 6.65 Year

Newcastle GIB 00 350 76168 Nova 90 O'shore 90 day pounds 50,000 7.25 Year

Portman CI 01481 822747 Gold Bond Acc 3 year pounds 5,000 8.00F Year

NATIONAL SAVINGS

Accounts & bonds (gross)

INVESTMENT ACCOUNTS 1 month pounds 20 5.25 Year

pounds 500 5.75 Year

pounds 25,000 6.00 Year

INCOME BONDS 3 month pounds 2,000 6.50 Month

pounds 25,000 6.75 Month

CAPITAL BONDS Series I 5 year pounds 100 7.75 F Maturity

FIRST OPTION BONDS 12 month pounds 1,000 6.40 F Year

pounds 20,000 6.80 F Year

PENSIONER'S GUARANTEED INCOME BOND

Series 2 5 year pounds 500 7.50 F Month

NS Certificates (tax-free)

42nd ISSUE 5 year pounds 100 5.85 F Maturity

8th INDEX-LINKED 5 year pounds 100 3.00+RPI Maturity

CHILDREN'S BOND Issue G 5 year pounds 25 7.85 F Maturity

Looking for credit card or current account deals? Search here

Comments