Presenter: Vincent Duggleby

Guests: Anna Bowes, Hilary Cook, David Harris

TRANSMISSION 5th NOV 2001 1500 - 1530 RADIO 4

ANNOUNCER : But now MONEY BOX LIVE with Vincent Duggleby

DUGGLEBY: Good afternoon. It's fair to say the investor's lot is not a happy one, faced on the one hand by falling interest rates and on the other by a jittery stock market. Share prices have recovered from their September low but the economic news, especially from America, is not encouraging in the short term. Recession there is on the cards, and the UK is set for a downturn even if technically we avoid a recession. Companies are continuing to shed staff. The boom in house prices looks to be coming to an end, and that can't be good for consumer confidence.

The main government response has been to cut interest rates. In the US the forecast is for another half percent fall to 2% and on Thursday the Bank of England is likely to take another quarter point off base rate to four and a quarter which is bad news for savers who've already seen the income from a typical building society account fall by a quarter this year. Profits in the stock market have been few and far between unless you were sharp enough to catch the market below 4,500 after the attack on the World Trade Center, and the immediate question is whether the present rally will be sustained or that low will be retested perhaps in the heat of battle over Afghanistan.

We're told of course that stock market investment has to be viewed over the medium to long term and the most significant news in the past week is that the Boots Pension Fund has quietly shifted its entire 2 billion pound portfolio from shares into bonds. ICI have made a similar move, so what do they know that we don't? Certainly many advisors are pushing the merits of corporate bond funds and some types of guaranteed bonds, but do examine the small print very closely - you can always park spare cash in banks and building societies or national savings, but they've announced yet another drop in rates running up to Christmas. Is it a sensible move to adopt for variable interest long term?

You can call MONEY BOX LIVE with your questions on 08700 100 444 and with me to answer them Anna Bowes, independent advisor with Chase de Vere, Hilary Cook, Director of Investment Strategy with Barclays Stockbrokers, and David Harris Chief Executive of InvaTrust Consultancy, a sort of advisor to advisors. And first question comes from Jo in Stratford.

JO: Right I really have two questions - the second has to do with - what to do with disposable income, but the first is to do with Railtrack shares. They now see pretty worthless and I unfortunately opted for additional shares rather than taking dividends so I don't know what my position is likely to be?

DUGGLEBY: Yes that's the cruelest cut of all here I think really that one.

JO: Yes

BOWES: Well it certainly is and unfortunately at the moment there is - there is nothing you can do - the shares are suspended and till the company and the government decide what - what the future is going to be there is no question of selling these shares. The hope is the shareholders will get some money back and between the government and the company they will decide some of the assets within Railtrack are actually owned by the shareholders, so all is not yet lost but unfortunately nothing - nothing you can do at the moment.

DUGGLEBY: You can't trade? - you can't buy - you can't sell - you can't do anything?

BOWES: That's right, the shares are suspended.

DUGGLEBY: David, what's the tax position on these shares then? I mean what can you hope for in terms of the losses?

HARRIS: Well currently you can claim no losses at all but let's take the worst scenario that the company were declared worthless, then ultimately there will be a capital loss that you could claim against any gains that you may make within that particular financial year.

DUGGLEBY: Right, so you're stuck with that one but you're looking forward perhaps to the day when you do get some money out of it is that right?

JO: That's right, or to claim - claim some sort of losses. I don't suppose I can claim losses unless I have some sort of capital gains?

DUGGLEBY: That's right I think?

JO: Yeah well I don't think I'll be in that position so I'd lose - just lose out entirely unless there's some sort of pay out?

DUGGLEBY: That's right. I mean you can't - you can't claim a loss - the government won't - the Inland Revenue won't give any money back - all they'll do is to save you the tax if you have something which would otherwise be taxable. But what to do now - with any possible spare cash you have

JO: Yes, the position is I'm a pensioner with a modest but adequate income. I hold a cash ISA and a general ISA and I've got �15,000 scattered variously in - in building society and banking accounts with a very poor return, so I reckon I'd do better to bet on taking a block of �15,000 holding in premium bonds in the hope of getting a couple of modest wins in the course of a year.

DUGGLEBY: Anna, what do you think of that?

BOWES: Well, certainly as interest rates fall on premium bonds the risk of not receiving any prizes from them means that the investment itself is not as risky as it has been perceived in the past. It's really an alternative to having your money in normal building society accounts, but if you want to make sure that you will get returns from your cash then you really need to shop around to look for sort of the best rates that are available.

DUGGLEBY: I think Jo's very unhappy with the rate she's got - what sort of rates are you getting Jo?

JO: Oh something like 2.5 to I think it's 3.75 is the top rate I'm getting anywhere.

BOWES: Right, well you can certainly do better than that. I don't know if you have any access to the Internet or if there's somebody who can?

JO: Ah no I'm afraid I'm a - you know I'm an old - I'm an illiterate.

BOWES: Well, well you can get over 4% from some accounts so it's really a good idea.

DUGGLEBY: Some examples?

BOWES: The Portman

DUGGLEBY: ...examples

BOWES: ...well how much have you got Jo?

JO: �15,000 - once I call it in from - from its various scattered holdings.

BOWES: Well certainly someone like the Alliance & Leicester just on a High St Easy Access Account are paying 4% gross and that's from �1 up , so there are definitely better rates to be found. Really keep an eye on that and that's - that's a message for most people really is keep an eye on the rates that you're receiving because if you shop around you can probably do better and there's the old saying look after the pennies and the pounds look after themselves.

DUGGLEBY: The Saturday and Sunday newspapers Jo, have a look at those cos they usually publish a list of best buys. And that's where you can get an idea as to whether you're reasonably up with the leaders or not.

BOWES: And keep using your cash - you cash ISAs each year - you said you've got one so -so make sure you do that as well.

DUGGLEBY: Okay, we'll move on now to Elizabeth in Worthing - I beg your pardon Robert in Liverpool first - Robert in Liverpool?

ROBERT: Hello

DUGGLEBY: Hello Robert

ROBERT: My, my question very simply is this - I am a pensioner in my 88th year and I wonder whether it is best to leave what capital I have in the building society or to move it out into bonds which have been referred to in newspapers and on radio?

DUGGLEBY: Yes, much in the news - Robert can I ask you what is your income need and how much money have you got to provide that income need?

ROBERT: I can live within my income, such as it is, so the rest of it is capital to invest to produce an additional income.

DUGGLEBY: So it's a top up income for you?

ROBERT: Yes

DUGGLEBY: Okay, any children or grandchildren you want to leave money to?

ROBERT: Well that has been taken care for in my will.

DUGGLEBY: Alright - Hilary armed with that, how would you approach this?

COOK: Well corporate bonds - this is loans issued by companies do certainly provide an attractive pick up in interest - in interest payable, and particularly if you can wrap it in a tax free wrapper in an ISA - looking here at Boots which is about a safe a company as you're going to find, have a corporate bond paying over 5.5% gross - Safeway have one at over 6.5% so - pick up in income there which actually also preserves the value of your capital.

DUGGLEBY: Except of course these have dates on them - presumably and the capital could fall in the meantime before they are redeemed?

COOK: It is possible - Boots that is to 2009 - if interest rates were to rise then we would see - possibly see a fall near term in the value of the capital but you'd have to wait until 2009 to get it back. The Safeway one's to 2018 and that's why you're getting the higher pick up. If you're not too concerned about the near term preservation of value of capital then there are some very attractive pick ups.

DUGGLEBY: David?

HARRIS: Yes, I mean if Robert is not wishing to go directly into the market for corporate bonds then a number of the fund management groups run funds of corporate bonds, and this might be a more attractive way for Robert to think about going into this area of the market simply because he's not putting all of his eggs into one basket - the sorts of bonds that Hilary was talking about there, they are individual companies - yes they're blue chip, yes they've probably got what we call a Standard and Poors rating that is very high, but I'm always reminded that there were investors into a certain Barings Bank corporate bond.

DUGGLEBY: And indeed something like Marconi which looked as rock solid as...

HARRIS: Yes absolutely blue chip then along comes one Mr. Nick Leeson

DUGGLEBY: Any idea of which bond funds are suitable?

HARRIS: Yes I've picked out a couple - there's the Invesco Perpetual Corporate Bond which has got a good corporate, sorry, capital track record over the last few years and is paying about 5.8% return. If you wanted to go slightly more international so that you're broadening the field around the globe then the Newton International bond - that's paying just in excess of 4% dividend but hovers

DUGGLEBY: What about the charges - up front charges there and presumably an annual charge?

HARRIS: Yes, invariably you have an up front - because it's a fund you invariably have anywhere between a three and five percent up front on and they are smaller on the corporate bonds than they tend to be on equity funds, and then you're looking at about three quarters to one percent per annum.

DUGGLEBY: Okay there's some ideas for you Robert

ROBERT: Well thank you very much indeed. I really am uncertain as to whether to start plunging into these things or to leave the money where it is in a building society where I'm getting the top rate that I can get out of them?

DUGGLEBY: Well timing is everything and it is extremely difficult but what we do know about the building society rates is that they're almost certain to fall again, I mean I think that's virtually certain before Christmas and possibly by up to another half percent. So if those rates go down then I suspect the bond yields will also go down just a little bit but they won't necessarily fall as much, but remember that interest rates do move in sync so that they don't - one doesn't go up while the other goes down, and you may find that moving now will be better than leaving it perhaps for 2 or 3 months. Now then Elizabeth in Worthing?

ELIZABETH: Yes, I have a question based on pensioner bonds. I had a lump sum to deal with 5 years ago and put quite a lot of it into pensioner bonds. Yes that's right. And I've got rid of it mostly and got a nice bond that produces some income but next July I come to the end of my period of being able to invest there

DUGGLEBY: What - what yield were you getting then?

ELIZABETH: I've got - I've got 7% on �10,000

DUGGLEBY: Yes, right

ELIZABETH: It's a shame I'm going to lose that

DUGGLEBY: Well presumably your question is what can you do and how is it possible to match that sort of return?

ELIZABETH Well yes I realise I won't be able to, but I do need to get - this is the bit of capital I really want access to as well which is another point.

DUGGLEBY: Right immediate access - best yield Anna?

BOWES: Well with immediate access it's very difficult - the pensioners bonds themselves you really need to give 60 days notice.

DUGGLEBY: But that's pretty immediate really

BOWES: To get hold of it but it depends what we mean by immediate - that's obviously two months

DUGGLEBY: Well obviously in the case of Elizabeth I take it 60 days is alright - you don't literally want the money ?

ELIZABETH: Oh no no - I'm not thinking of doing anything particular - in fact until

DUGGLEBY: You merely don't want to lock the money up for - for a number of years?

BOWES: Well you aren't going to get 7% I'm afraid - do you pay tax Elizabeth?

ELIZABETH No

BOWES: You're a non tax payer?

ELIZABETH: My husband has arranged so that I don't pay tax.

BOWES: Okay well in that case obviously you're going to be able to get a little bit more - for a short term fixed rate bond I'm afraid the pensioners bond is not really the place you want to go into this time. You can get more - the Scarborough I believe have a - have a 6 month bond paying 5.5% fixed. Obviously that's quite short term, but you can look at getting up to 5.2% gross for 3 years, but really I'm afraid those are the rates - if you're looking for security, absolute guaranteed capital back, those are your best bets and really I'm afraid you're not going to get anywhere near the 7%

DUGGLEBY: What's the current pensioners bond doing Anna?

BOWES: The pensioners bond for a one year you see is paying 4.2% gross now - 5 years where you've come out of is 4.65 - so you can see where rates have fallen. Do you have any cash ISAs at all - have you used your cash ISA?

ELIZABETH: I'm not quite sure what the term - I've got two ISAs - yes one �7,000 and, and another �5,000 and I get

BOWES: But you see

ELIZABETH: Between 7 and 8% on those

BOWES: Okay and for a little bit of money, although you don't pay tax on them you can lock that money away so you don't have to worry about it and you can get a little bit more - Northern Rock are paying 5.55% on a cash ISA - so that's a little bit more

ELIZABETH: But I'm getting 7- 7 and a bit

DUGGLEBY: Yeah but you're never going to get that - unless Hilary interest rates suddenly bounce up - now that would happen if presumably we had a very sharp recovery?

COOK: It's certainly quite possible that in 2 years time we could see interest rates rising quite sharply and the amount - the actions the governments have taken around the world to try and stimulate the economies could easily have that sort of impact - partly because they've decided that inflationary concerns have been negated for the moment, and so they'll take that risk.

DUGGLEBY: So you're suggesting then that tying up money for 2 years is probably no bad thing - just take what you can get and maybe you'll be able to get a better rate in say 2 years maybe?

COOK: That's what cash markets are saying - that interest rates will be rising again in 2 years time.

DUGGLEBY: Alright Elizabeth there you are and we'll move on to Beryl in Caterham?

BERYL: Hello

DUGGLEBY: Hello

BERYL: Yes, my question refers to a high tech maxi ISA fund which I took out in March 2000 and invested �7,000 - it's gone down at the end of the first year it went down to �2,000 something and at the moment it's worth �2248 so should I sort of hang on

DUGGLEBY: What are the specific underlying investments in it? What are you actually in?

BERYL: Yes, it's in three only investments - the Aberdeen Unit Trust...

DUGGLEBY: Aberdeen yes - we know that one yes

BERYL: Framington - unit management net

DUGGLEBY: Yeah net net fund yes

BERYL: And the Societ� Generale

DUGGLEBY: Societ� Generale - yeah - well David those were three - yeah you mentioned the word perfectly reasonable - the thing is David at the time it was done March 2000 it seemed a reasonable decision?

HARRIS: Well it was certainly something that was highlighted everywhere - it was the tech boom, everybody needed to be in technology - they were heavily marketed, heavily sold and I'm afraid that people like us sat around this desk were sucked in perhaps in exactly the same way as this lady Beryl has been and everything has gone wrong in technology. We all know exactly what's happened Beryl - I feel very sorry for you. But there are lessons that we're all learning from this that you should try obviously in the future to have some sort of better balance within a portfolio rather than being all in one sector.

DUGGLEBY: Can I ask you Beryl - is this your only share investment?

BERY: No I did - I bought quite a few small amounts of high tech funds myself because I was interested in the stock market - all of those have gone down

DUGGLEBY: Yeah the problem is here it's balanced portfolio - I want to bring in Hilary here because if you've got nothing but a portfolio with tech stocks in, I mean it's hopelessly unbalanced Hilary, and I mean you've just got to do something.

COOK: Well absolutely - we wouldn't want technology shares to be more than 10% of any share portfolio. And we would first of all say buy Glaxo, buy BP - there's some very solid companies around there to provide capital growth. At least by being in a fund you are spreading the risk of technology - I mean these are very risky companies and they will in the medium to long term these investments provide very good growth, but in terms of a balanced portfolio you want to spreading your risk.

DUGGLEBY: So you start by saying to yourself keep something in that tech portfolio - now what's it be to be - which of those funds is it the Aberdeen one on the grounds that that's sort of the largest and the longest running - is that the one you keep?

HARRIS: I think I'd probably go along with that - certainly the Framlington Net Net unit trust is still there - unfortunately the investment trust version of that fund has now I think decided to wind up completely and return what is left to shareholders, but yes if you were to keep that in the Aberdeen technology it would be nice to know the exact nature of Beryl's total technology portfolio but I agree

DUGGLEBY: Well that - as I say Hilary you've got to decide - let's say - I mean depending Beryl - 10/20% in technology - so essentially get rid of the rest then what to do with it? Hilary's saying put it into some individual blue chip companies, maybe there's some funds that you can put it in, some saver funds, big investment trusts?

HARRIS: Yes exactly - I mean. One could look globally at let's say some of the global growth investment trusts which have suffered during the last 12 monthly mainly due to equity falls but also due to the fact that the discount to net asset value, which is something quite peculiar really to the investment trust sector - i.e. where the actual share price is worth less than the net asset value per share which throws up opportunities during poor market conditions to actually buy good quality underlying funds at a slightly cheaper price.

DUGGLEBY: But we're talking about the big international UK funds not specialist funds - the thing about specialism is that it can go awfully badly wrong, and I mean even in the market of course at the moment I mean there are some sectors Hilary that are absolutely taking a terribly pounding?

COOK: Oh absolutely - telecomms still very difficult - technology very difficult - well it's certainly worth looking at 3I in terms of an investment trust - a big spread of small companies and probably the best way of playing technology in fact.

DUGGLEBY: Sure, otherwise stick with fairly large well known income or growth funds, the like of which are produced by any of them - Invesco or M & G

HARRIS: Foreign & Colonial

DUGGLEBY: Yeah, well the big investment trusts

HARRIS: Big investment trusts - I mean you won't go

DUGGLEBY: Henderson and people like that you know or one of the Scottish, big Scottish fund managers. Those are the sorts of things you'd be looking at, but I'm afraid Beryl it's bite the bullet time.

BERYL: So to withdraw the Framlington and the Societ� Generale?

DUGGLEBY: And switch it into something which is just going to be much less - much more boring

BERYL: Take a chance on leaving the Aberdeen?

DUGGLEBY: Well yes leave something in there - I mean don't - don't abandon the whole lot. But as I say reduce otherwise as I say, you might strike lucky but the likelihood is that you will probably go nowhere very fast. And we'll take Peter now in Ludlow.

PETER: Hello

DUGGLEBY: Hello Peter

PETER: Hello, I'm just wondering for the sake of income and capital growth in these difficult times whether you would advise me to get into a NorwichUnion or Standard Life with profits bond?

DUGGLEBY: Well, the with profits bond concept I think first David - can you just clarify for listeners what these profits are, where they come from and how they're distributed?

HARRIS: Yes I mean basically they come from the main insurance company fund - the insurance company will manage a portfolio of assets. They hopefully will make profits on those assets and at the end of the year they will declare a - in effect - dividend to you and that dividend will be added to the value of your policy on an annual basis, a reversionary bonus that's known as, and then at a later stage it is possible that if the with profits bonds has a lifetime on it then you might get a terminal bonus as well. Usually, in fact I think always, the reversionary bonus once it's added to the policy cannot be taken away, but there's no guarantee that the terminal bonus would ever be paid.

DUGGLEBY: Okay, Anna - Norwich Union and Standard Life suggested - are they amongst yours?

BOWES: Both good companies yeah - they would be both companies that we would recommend and with profits big strong institutions and that's what's important. You can never guarantee anything as we've seen with the Equitable Life situation, but still a good secure investment.

DUGGLEBY: You need companies essentially who can put money aside for the rainy days so that they can carry on what's called smoothing I think is the word isn't it?

BOWES: That's right - and whilst the reversionary bonus, the thing to remember about the reversionary bonus is that whilst it can't be taken away that's as long as there's no market value adjuster applying when you try and encash it which at the moment many companies are applying.

DUGGLEBY: Which of course is once you're locked in for the term you have to abide by that term. So we - we think that if that's the route you want to take with companies - both Norwich Union and Standard Life are as good as you're likely to get Peter.

PETER: Thank you very much indeed - excellent.

DUGGLEBY: Thank you - Tessa in Dorset you're next?

TESSA: My Tessa matures on the 18th December - it'll be about �12,000 plus loyalty bonuses and I'd like some advice about where to invest this money please?

DUGGLEBY: Tessa only ISAs is a special category for this maturing money Anna?

BOWES: Absolutely. Whilst - whilst Tessas and Peps were replaced by ISAs a few years ago, Tessa only ISAs was - was offered in addition to your normal ISA allowance, so your capital that matures, the �9,000 that's maturing of the whole amount, �9,000 can be rolled into a Tessa only ISA. Now the same applies really as we're looking at building society accounts etc - you want to look around for the best rates that are available for you, but there are alternatives to just taking the cash option. You can look at some stock market linked Tessa only ISAs - also whereby your capital is secure, but in 5 years time you could be looking to take some of the rises in index in the stock market effectively

DUGGLEBY: Yeah those are the risky end of the market?

BOWES: Those are the more risky but you

DUGGLEBY: Tessa do you want to take a risk?

TESSA: No, I've already got money invested in the stock market

DUGGLEBY: Okay let's keep it secure then Anna?

TESSA: I'm looking at capital growth

BOWES: Well the best rate available at the moment is 5.55% with the Northern Rock, so that's a good one. You have to give 30 days notice but that's the best rate you're going to get at the moment. Keep an eye on the rates - you can also switch them around throughout the time. Where the Tessa only ISA does differ from your Tessa is that it's no longer a 5 year investment in many cases so keep an eye out - in this - in this situation the Northern Rock is not - it's not got any term. It's just that you have to give 30 days notice if you want to switch it in the future.

DUGGLEBY: But remember your fund is not yet matured so that the market may have changed by then and you have 6 months in which to make your decision, so you don't actually have to rush straightaway. All you need is a certificate of maturity. Take that to any other institution that you like

BOWES: And obviously in the 6 months that you're waiting to decide it's being taxed so

DUGGLEBY: Yeah of course it's being taxed

BOWES: Good idea to - to deal with it when you can but you're absolutely right - you don't have to rush

DUGGLEBY Yeah you've got a bit of time and you'll obviously be offered perhaps good terms, maybe to stay with who you are at the moment because that's

TESSA: The Halifax

DUGGLEBY: Yeah well they may want to keep your money. So watch what they've got to offer as well

TESSA: Well I think they do yes

DUGGLEBY: Right, okay?

TESSA: Thank you very much

DUGGLEBY: And Sylvia now in Shrewsbury?

SYLVIA: Good afternoon

DUGGLEBY: Afternoon

SYLVIA: I was thinking of investing in zeros and I wondered what your opinion was?

DUGGLEBY: Sylvia you really - have you any idea what a zero is?

SYLVIA: Yes, it's a zero preference share where you make a capital gain with luck and no interest

DUGGLEBY: Right, Hilary?

COOK: Well, these are relatively risky investments - certainly compared to a lot of other shares, and it is very important to look very closely at the - at the terms and conditions of the individual zero. And they do vary in their risk profile - how much at risk your capital might be according to these conditions. But the key is that you really you do need to be expecting growth in the stock market to be - to be confident of receiving what does look like very attractive capital growth.

DUGGLEBY: And of course you - that's subject to capital gains tax - so there's no income tax to pay - that makes it attractive if you've got unused capital gains allowance. But David there are things called hurdle rates on zeros aren't there which have to be met in order for them to pay back at all?

HARRIS: Certainly there are. Interestingly in recent weeks there's been a lot of talk about the split capital market and I think it's well for any listener to actually appreciate the difference between what are called the old style split capital trusts and the new style. If we're talking about the older style, then generally speaking the zeros are very well covered. And this hurdle rate you speak of - which is the percentage by which the total assets within that company have to grow every year to the wind up date of that trust in order for the price of the zero to be paid out - generally speaking are a negative figure. With some of the newer investment split capital investment trusts then unfortunately they have some bank debt in the proceedings as well and

DUGGLEBY: What because there's a pecking order in this isn't it? - I mean it's the first people in the queue are the zeros and they should get their money back. The next people are the capital shareholders who probably will get something and then there's the income people who are lucky perhaps to get back what they put in cos they've have all the income in the meantime. So look Sylvia it's a pretty risky thing. I don't think you should do this without going along to a stock broker because they'll produce a list of zeros, they'll produce a list of the yields and these hurdle rates and various other bits of technical information. Then it's up to you to make up your mind, but it's very difficult for us on this programme to say look buy this or that zero - it just doesn't work like that.

COOK If you are speaking to a stock broker do also suggest that they look at these endowment funds, invest in second hand endowment policies cos that's a low - possibly a lower risk way of getting capital growth.

DUGGLEBY: Okay and next caller is Frank in Cheltenham

FRANK: Hello yes good afternoon

DUGGELBY: Good afternoon.

FRANK: My question is - advice please on investment choices for a lump sum say �60-70,000 to provide for the independent education of our two grandchildren up to say GCSE

DUGGLEBY: How old are they?

FRANK: They are 10 and 11

DUGGLEBY: Well we can look ahead Hilary - let's start with you - we can look ahead 7 or 8 years then - so an investment strategy �70,000, 7 or 8 years ahead?

COOK: Well you're looking for a capital growth and with a 5 year or more time horizon then equities do look very attractive, particularly at the current levels of the stock market, so mostly be in UK shares, invested in shares and maybe some corporate bonds, but mostly in shares and in a broad spread - possibly via a tracker fund, a low cost tracker fund or an I share - an even lower cost way of tracking the stock market.

DUGGLEBY: Okay but something in cash Anna - what would you suggest for the cash element?

BOWES: I think that a certain amount in cash it's like anything we've talked about - the balanced portfolio - and you don't want to just put everything in to shares in case you do want to access some of that money, so perhaps of that amount sort of between five and ten thousand pounds in cash.

DUGGLEBY: And grand parental gifts of course the interest can be deemed that of the child so therefore it's tax free up to the single person allowance and David?

HARRIS: And finally I'd go back to the last questioner and I'd also look at a portfolio of zeros because they do have predetermined returns which are very useful if you know the level of fees that you're going to be paying for the grandchildren.

DUGGLEBY: Okay thank you very much indeed - that's Anna Bowes from Chase de Vere, Hilary Cook from Barclays stock brokers and David Harris from Inva Trust Investment and Market Consultancy. If you want to follow up the advice you've heard call the information line on 0800 044 044. Or log into our website: bbc.co.uk/moneybox where you'll find transcripts of all the recent programmes. Don't miss MONEY BOX at noon on Saturday with Paul Lewis. I'll be back same time next Monday afternoon to take more of your calls on MONEY BOX LIVE.

BACK ANNO: That was Vincent Duggleby. The producer was Jennifer Clarke.