Live webchat with Alvin Hall, financial guru, broadcaster and author, Thurs 29 March, 11am to 12noon

[RachelMumsnet]

Following on from the discussions about last week's budget, we're joined tomorrow morning at 11am by Alvin Hall who is returning to mumsnet to answer questions on saving and investments.

With bank accounts rarely staying ahead of inflation and pensions unable to sustain us in retirement, many people are looking at the stock market as a way of maximising returns. You may already have investment in the stock market in the form of a stocks-and-shares ISA, a Self Invested Personal Pension (SIPP) or an endowment mortgage, but do you understand how it works?

In his latest book, The Stock Market Explained: Your Guide to Successful Investing, Alvin gives a clear and practical explanation of how it works and types of investments available to you. He'll be taking your questions about the stock market, saving and investing tomorrow from 11am. If you can't make it you're welcome to post your question in advance to Alvin here. All those who join in the webchat will be entered into a draw to win one of five copies of Alvin's latest book.

[AlvinHall]

@TheRhubarb

Hi Alvin

I am 40 and my husband is 46. Both of us are line to receive a state pension but neither have a private pension. We've never had enough money to spare as he earns £14.5k pa and I earn just over £10k pa working for myself. I am becomingly increasingly worried about our lack of any kind of pension plan and I realise that we have probably left it too late.

I am currently putting £150pm into a savings account which is £100pm for tax purposes and £50pm for some sort of pension. This is from our joint account. I realise it's not enough, but do you have any recommendations as to where I can make a regular contribution that will give us a little something when we retire? If we both plan to retire at the age of 65, just how much should we be saving now?

Any advice or recommendations would be truly appreciated.

Your husband still has 19 years until your retirement goal, and you have 25 years, so it's not too late! In your cases, I think you should try to establish how much money you want to have at retirement, and then work toward achieving that goal. Right now, it seems as if you're putting money away, but you have no stated goal.

By knowing how much you want to achieve, you then can focus on the
important benchmarks along the way, and each time you achieve a benchmark, it will further motivate you.

So the best advice I can give you would be to define your specific, monetary goal and move toward achieving it. I think that will give you a greater sense of security about your retirement, because then you will know how much money you and your husband will want to have available.

[TheMulberryTree]

Hi Alvin! We're looking to buy a house and so far we've been sensible in looking at the lower end of our budget. However, there are houses that are more appealing but the monthly mortgage repayment would be the top end of our budget.
Baring in mind we're both in our early twenties with a duel income, our earning potential is much higher. How risky do you think it would be to opt for the nicer, more expensive, house with the higher monthly repayment? Do you think the interest rates will rocket in the foreseeable future?

[AlvinHall]

@cm22v07

Hello Alvin,
I used to love your show 'Your Money or Your Life'- it was brilliant.
Have you got any other TV series in the pipeline?
Thanks!

Yes, I'll be appearing on The Apprentice: You're Fired in early May, and am in talks with production companies about a series on contemporary art, and another one on personal finance. I have all fingers, toes and eyes crossed for good luck.

[AlvinHall]

@LottieJenkins

Hi Alvin, not a money question but just want to say that the "blooper" scene of you with the ostriches is one of the funniest that i have ever seen! I think it was twelve takes before they got what they wanted wasnt it??

It was actually 29 takes to get one usable take.

The experience still haunts me. I've been asked "Are you that guy in that ostrich video?" in airports in Australia, in Chicago, and in Europe.

I'm sure there will be an ostrich on my tombstone when I die.

[AlvinHall]

@nowit

Hi Alvin,

We are due to move in a few weeks and have fixed for two years. We have a small amount of shared equity that is interest free for 5 years. We really want to plough our money into getting rid of this as quickly as possible but without the temptation of dipping into it.

Can you recommend a notice savings account that you don't have to have a lump sum to set up please? We will be paying in £200 per month and would like it closed for 4 years so that we can't touch it.

Obviously a good interest rate would be a bonus but we do know how rare they are at the moment.

Many thanks

Check the financial papers at the weekend, and their websites, to look for the best notice accounts. Also, search online, at various information websites.
Moneysavingexpert.com is a good one for this type of information, and another one is Savvywoman.co.uk

[TrumpHair]

Welcome Alvin!

Please could you advise on the best way of investing a small amount of money for a child.

Thank you.

[Toolong]

If you had a choice when planning for retirement , would you either
a) buy a property and rent it out, or
b) would you buy a pension?

[AlvinHall]

@lockitt

Hi Alvin I have another question from a friend!

They have a bad credit rating and have recently been declined for a personal loan to clear their credit card.

What are the best steps to repairing your credit rating and how long will it take before you can apply for credit and be accepted?

Your friend needs to get a copy of her credit report immediately, to see what is the source of her bad credit. She needs to check with all three credit reporting agencies. If it's late payments, she needs to start to make all of her payments on time. It will take about six months before she will see a noticeable improvement.

If there is any incorrect information on her credit report, she needs to contact the creditors to try to correct that information - as soon as possible. This will take a while, and she may find some of it frustrating. And if she really is struggling, she may want to go to see a counsellor at Citizens Advice, or one of the other charities set up to help people who are in debt.

The one thing she does not want to do is to sign up with one of those For Profit companies, who make promises that they may not be able to deliver on. We see their ads on television, we hear them on the radio - do not yield to that temptation!

[cm22v07]

Great looking forward to your appearance on You're Fired.
A quick question, do I need to sort my ISA out before April if I started one a little bit later last year (May-time), how does this work? When is the best time to do it?
I know this is probably a simple question but I can't seem to find the answer anywhere online?!
Thanks.

[AlvinHall]

@Toolong

If you had a choice when planning for retirement , would you either
a) buy a property and rent it out, or
b) would you buy a pension?

When looking at a retirement, you have to look at the various streams of income that you want to have at retirement. So we know that you'll get a state pension, which may not be very much money. You may have a pension from your employer, and then money that you have saved up for retirement. Whether you buy a property, or buy a pension, depends upon your individual circumstances. It does not have to be an either/or situation.

Select the one with which you feel the most comfortable, but recognize one fact: that putting all of your eggs in one basket always involves a degree of risk.

[AlvinHall]

@cm22v07

Great looking forward to your appearance on You're Fired.
A quick question, do I need to sort my ISA out before April if I started one a little bit later last year (May-time), how does this work? When is the best time to do it?
I know this is probably a simple question but I can't seem to find the answer anywhere online?!
Thanks.

If you contributed last year in May, then you used your ISA allowance for the 2011/2012 tax year. You have to wait until after this years deadline, April 5th, to make another contribution.

[AlvinHall]

@dietstartstmoz

Hi Alvin,
Can I just say I think you are fab. OK question time-we have two children aged 7 & 4. Our youngest has special needs. I really worry about the future for both of them, especially the youngest one as he will have extra challenges to face. Thinking ahead-the eldest may want to go to Uni in just over 10 yrs (eek), without all the other financial milestones of adulthood they may both face (driving, moving out of home etc.), we do not currently save any money for them. Money has been tight and we have some debts we are currently paying off. I am conscious that we need to do something asap as time is moving on, where do we start? I know nothing about the stockmarket or investing and don't know where to begin. Can you please advise? Thanks

The first thing you need to do is get out of debt, and I'm specifically referring to any high interest, consumer debt, that you're carrying, on credit cards, store cards - anything similar to that.

Then you need to make sure you have an emergency fund of three to six months in the bank, so that if something goes wrong, you have a cushion, and you have time to consider your options.

Once you have those two things in place, then you can start putting money away for your children. Keep in mind that other relatives can contribute money instead of presents to your children's futures, therefore the full burden won't be on you.

Before you consider investing money in the stock market, you need to educate yourself first. That's one of the reasons I wrote this book, The Stock Market Explained. Don't feel you have to put all your money in the stock market. In fact, you may discover that the risk is too great for you in which case, saving in a building society may be appropriate.

Secure the day-to-day financial life of the family first, then concentrate on your children's future.

[TheRhubarb]

So for someone wanting to take out a stakeholder pension, are there any good deals out there?

Also, if you don't mind another question. We currently have an ex-council house and are aware that ex-authority houses have a ceiling rate that private houses do not. If you had the extra money to buy a private house, would you do so with the intention of making a profit or would you invest it?

[thestringcheesemassacre]

Alvin,

What kind of vehicle should we invest in with our childrens saving? We put away roughly £1500 a year for them and would love it to grow healthily but still be very secure.

Thank you

[AlvinHall]

@TrumpHair

Welcome Alvin!

Please could you advise on the best way of investing a small amount of money for a child.

Thank you.

My first question is how much risk do you want to take with this money? If you are totally risk-adverse, then your only option is a bank or building society. If you're willing to take on more risk, then you might want to look at the stock market, specifically, unit trust. Many allow people to invest small amounts of money at regular intervals. Look for a trust with low on-going expenses, therefore more of the profit it makes will end up benefiting your child.

Tracker funds tend to have the lowest expenses, so they may be something you want to look at first, but keep in mind that the money you invest in any stock market-related vehicle will be at risk. Expect the value to fluctuate up and down. Focus on your long-term goals for your child, rather than the day-to-day volatility. Set certain benchmarks along the way that you want to achieve, and if the investment isn't achieving them, consider making changes.

[TrumpHair]

Many thanks for your answer.

[AlvinHall]

@TheMulberryTree

Hi Alvin! We're looking to buy a house and so far we've been sensible in looking at the lower end of our budget. However, there are houses that are more appealing but the monthly mortgage repayment would be the top end of our budget.
Baring in mind we're both in our early twenties with a duel income, our earning potential is much higher. How risky do you think it would be to opt for the nicer, more expensive, house with the higher monthly repayment? Do you think the interest rates will rocket in the foreseeable future?

There's two points of view about that. The traditional one is that you should buy the most house you can, the idea being that this house will go up in value, or at least retain its value. The second point of view is that you should buy a house that you know you can reasonably afford, without putting yourself under undue mortgage pressure.

In my own life, I chose the second option because of the job uncertainty that I anticipated in my life, and I wanted a mortgage that I could afford through good times and bad times. In your post, you have two incomes, and your potential is much higher, so you may want to stretch a bit. But don't stretch to the point where if one thing goes wrong - such as one of you losing your job - you could lose the house, or the financial pressures would bring stress to your marriage.

Be realistic about this. As far as interest rates in the future, it looks like the government will keep them flat for a while, but to know more about the future, I'll have to consult my crystal ball! (Or my bowl of goat entrails/or cup of tea leaves!)

[AlvinHall]

@thestringcheesemassacre

Alvin,

What kind of vehicle should we invest in with our childrens saving? We put away roughly £1500 a year for them and would love it to grow healthily but still be very secure.

Thank you

I have to give you general advice because I don't know the ages of your children. Since you're looking for healthy growth, you probably want to look at a growth-oriented unit trust, run by a fund company with a long history of good management and low fees. This follows classic thinking about long-term growth for young people.

What concerns is me is when you said you want the money "very secure". This would suggest that you're also risk-averse. If you choose to invest the money, look at tracker funds, or large cap growth funds. While they will be volatile, they will be less volatile than funds that focus on smaller, younger companies.

[Calypso]

Just remembered about this and hope you have time to help...Back in 1996 when we bought our first house we took an endowment mortgage and pay £200 a month to I think it's now Aviva. Don't know how much it's worth but am guessing not that much. Would we be better just to keep on paying in and hoping one day we get something from it, or would we be better cashing it in (know you don't get much if you do that) and investing that sort of money elsewhere. We can afford to "save" it - just want to know we're "saving" it in right place.

[AlvinHall]

@diffoname

I think you are very good.
This is complicated and I would like to say I know I have been an idiot...just so we get that out of the way.
I have a Wonga loan that is around 350 to 400 a month and a Paydayuk loan which I pay abit of the balance of every month...Loan is 260 interest makes it around 320 so I pay around 90 a month.I also have a wageday advance loan and pay them back in one go it will be 324 this month as obviously it all starts increasing.I work 30 hours on minimum wage a week and get tax credits etc and child benefit for 2 children I will soon be working as a nurse in London on around 29500pa.But have to pay 450 to stay up there in keyworker accomodation and 200 travel and 600 rent and council tax for where my family are based(we cannot move).and other normal bills etc.Am doing this as believe in the medium to long term it will be best for us all.I will work 1 agency shift a week for our food and clothes money.
However how the heck do I get the payday loans sorted?
Would really appreciate your advice.
Thank you.

First, let's view this as a completely new start. Forgive yourself for what you have done, and strive to create a better future for yourself. Head as soon as you can to Citizens Advice, CCCS (Consumer Credit Counselling Services), or one of the other charities that helps people with debt. Be honest with them about your situation, work with them to create a plan that you can stick to - this is very important - and then, be diligent. I can't wave a magic wand to get you out of this situation, or ask you to click your heels three times so that you miraculously end up in a different place. You just have to come up with a long-term plan, and stick to it.

And remember to promise yourself that you will never, ever, ever do this again! Start today, on a new road, and get the help you need.

[TheMulberryTree]

Thank you for answering my question, one of the main reasons for buying a house is because our monthly repayments is likely to be less than rent. But in consideration of the increasing cost of childcare, train fares, food, petrol etc.. how much do you think an average family should have as disposable income?

The average family spends something like 50% of their salary on childcare. What do you think is the 'right' percentage to allocate to childcare/mortgage/bills? And how much of your income should you be 'allowed' to enjoy?

[AlvinHall]

@LovesBeingWearingSkinnyJeans

Alvin you are the best I used to love your programme and am now finding myself in a position of needing your advice. I was made redundant 3 years ago and have worked pt for tge last couple of years. I have a 4 year old and a 6 month old and am now looking for ft work to go back to following maternity leave at the end of may. I have some loans and cc and am now at the point of struggling to stay on top of everything. Dh works ft and his his we're cut by 20% last year which is what has really made tge difference. He cannot work any extra hours or on an addition job. What should I be addressing/doing to get myself sorted?

Thanks Alvin

You and your husband need to sit down immediately and work out a realistic budget for yourselves that considers all contingencies. In doing this budget, try to determine what is the minimum amount you need to continue your lifestyle.

In working out this budget, you may discover, for example, that you need to reduce your loan payments to survive. Contact the lenders, and try to negotiate a lower payment for yourself without an increase in interest charges. It's better to be pro-active in this situation rather than waiting to see what's going to happen.

[BoffinMum]

Hello Alvin,

I am a typical squeezed middle person who has high housing costs, high childcare costs, long working hours and a monster commute. What on earth do you do to mitigate things if your childcare costs and commuting costs equal your net income, and you can't find a job locally???????

[BoffinMum]

PS I love your work and I make my children read your books.