Telegraph Money asks two experts to rate reader Jame Arben’s portfolio
In this new series, Telegraph Money will analyse readers portfolios looking at the good, the bad and the ugly and providing recommendations on how savings pots can be improved. Read previous versions here
Turning 40 and realising you have not planned for retirement is a nightmare for some, for James Arben, it was a reality.
The saxophonist from London has spent his life touring, playing Glastonbury and even performing with Led Zeppelin frontman Robert Plant. But while enjoying the moment he failed to plan for his future.
“I panicked when I got to 40 when I realised I had nothing outside of a tiny teachers’ pension I get for giving music lessons a couple of days a week,” he said.
Investing can offer a bumpy ride and is only for the long term
Savers under 30 years old will have many claims on their money. Saving for the future can sometimes get relegated behind the immediate demands on their cash, but is vitally important.
In this series, we will look at how young savers with this focus on the future can put their money to work. We will examine the options for those with various starting pots, whether they are built through saving from an early career or by other means, such as inheritance from grandparents.
In this first part, we focus on how savers with £10,000 can hope to grow that pot to £50,000.
Saving money is usually a slog for many households, but the last year has been an exception. We asked investing experts what they would do with a £7,000 windfall to help it grow.
Cash Isa
Cash Isas are the simplest form of Isa and are available from most banks and building societies to those over 16.
Interest paid on cash Isas has dropped to record lows, but they remain a popular option as they allow savers to earn interest on up to £20,000 each year tax-free.
Since 2016 these deals have become less appealing as a tax-saving measure. The introduction of the “personal savings allowance” now means basic rate taxpayers can earn up to £1,000 in interest before paying income tax.
Higher ratepayers can earn £500 while additional ratepayers are taxed on all their interest.
This means cash Isas are only useful to additional rate taxpayers and savers who have already maxed out their £1,000 personal savings allowance, which at current rates would require saving hundreds of thousands of pounds.
One reader needs cash for a future getaway
Credit: Sylvain Sonnet/Corbis
Billions of pounds has been kept from the clutches of the taxman since individual savings accounts, known as Isas, were introduced in 1999. In the last tax year alone, £67.5bn was saved by adults in Britain, an increase of £2.3bn compared with the previous year.
But while Isas offer a simple chance to save tax free, they also throw up a range of questions. There has been a proliferation of Isas launched in recent years, and accounts now cover everything from savings for children to retirement planning. Here Telegraph Money answers some of your biggest Isa questions.