The mood of the moment

'Tis the season for an adroit investment to take advantage of the tax break. Ken Welsby reports

The postman had a pained expression on his face the other morning as he handed over my mail and that of my neighbour. "It's getting almost as bad as Christmas," he said. "I've never seen anything like it."

The cause of his complaint was easy to see: in addition to the usual crop of bills, credit card statements and even a couple of real letters, we were the grateful recipients of no fewer than a dozen mailings from investment houses. And so, to judge by his bulging mailbag, was just about every other resident in the street.

Just as the stores like to remind us that there are only so many "shopping days" left to Christmas, so the fund managers are reminding us that, as of today, there are only 13 investing days left to go, to the end of the tax year.

Put up to pounds 6,000 into a personal equity plan before 5 April and all the money you make on your investment is entirely tax free. But you must hand over the cheque and complete the paperwork before the deadline.

Many of the leaflets and brochures which the postman delivered made the same point, and it's one that forms a constant refrain from financial advisers: you will make more money investing in shares than leaving your money in a savings account.

The problem is that, unless you want to spend all your spare time number- crunching, you're unlikely to assemble a portfolio of consistent winners.

Unit trusts and investment trusts offer investors a way to reduce the risks. They should outperform other types of investment such as building society accounts - although they will not beat the individual, out-and- out winners in the stock-market stakes.

Over the last five years, for example, pounds 100 a month saved in a building society account would now be worth around pounds 8,000. The same amount in a reasonably performing unit trust would be worth more than pounds 12,000.

Most of the PEPs advertised by the large fund management groups put your money in unit trusts or investment trusts. They range from general funds investing in well-established UK companies, to specialised ones concentrating on high risk/high reward sectors such as health care and high technology - or in particular countries or regions such as North America, the tiger economies of South East Asia or Latin America.

But remember: because of its status as a tax shelter, your PEP must invest most of its funds in what are known as qualifying assets - in simple terms, shares in companies based in the UK or continental Europe.

The problem is timing. Private investors are often tempted to buy units or shares when prices are high, and stay on the sidelines when they are falling. Yet the best way of making money is by buying when prices are low.

With this in mind, you may want to consider tucking away pounds 20 a month or more in a monthly savings plan. Over the long term, your savings should average out the ups and downs of the stock markets. If you had saved pounds 100 every month in a top-performing unit trust over the past 10 years, your investment would now be worth more than pounds 25,000 - far more than any savings account could delivern

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Arts and Entertainment
TV
Voices
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Sport
Steve Bruce and Gus Poyet clash
football
News
Graham Norton said Irish broadcaster RTE’s decision to settle was ‘moronic’
TV
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths
Life and Style
life
Sport
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
News
Amazon misled consumers about subscription fees, the ASA has ruled
news
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Executive - OTE £40,000

    £15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

    Austen Lloyd: Law Costs HOD - Southampton

    £50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

    SThree: Recruitment Resourcer

    £20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Day In a Page

    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot
    Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

    Poldark star Heida Reed

    'I don't think a single bodice gets ripped'
    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    Families clubbing together to build their own affordable accommodation

    Do It Yourself approach to securing a new house

    Community land trusts marking a new trend for taking the initiative away from developers
    Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

    David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

    The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
    With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

    Money, corruption and drugs

    The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
    America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

    150 years after it was outlawed...

    ... America's first slavery museum is established in Louisiana
    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
    Tony Oursler on exploring our uneasy relationship with technology with his new show

    You won't believe your eyes

    Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
    Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

    Moores must go. He should never have been brought back to fail again

    The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn