Can a student save?

By THIS IS MONEY
Updated:

 

Iam at university and want to save, even though my income is limited as I only have a part-time job. PEPs are trendy but is this the best idea and how do I choose one from so many? Will any accept regular but small amounts?

KK, Gravesend.

Some PEP providers like Perpetual will accept as little as £20 a month and PEP investments are tax free. But PEPs are share-based investments so they fluctuate in value and should be seen as long-term investments. If you suddenly need your money back when the stock market is low you could get back less than you put in.

Why not try a TESSA? You get tax free returns but it's not a share-based investment, so you don't risk losing any of your savings. To get returns tax free you must leave your money in for five years, but if you need it in a hurry you'll get all of it back plus interest. You'll have to pay tax on the interest but you won't have risked your capital.

Shop around comparing charges and performance.

Most watched Money videos