advice re pep

Was the idea for these to be paid out of the income, or by cashing in part of the PEP ?

What is it invested in exactly ?

That seems to indicate it's invested in equities, which are in one of their periodic bear markets (see the FTSE All Share Index chart, which is a reflection of what's happened to share prices

If he knew enough to invest, he would have known that over the long term, shares perform better than other forms of investment, but whether they're the best option in this scenario is another question.

If you want to familiarise yourself with the options, have a browse through this

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It really all depends upon the nature of the income required for your brother.

That's all right ! You shouldn't need to be, just so long as you know where to get good information when you require it. This is probably one of the best places in the UK, along with The Motley Fool website.

Share prices are fundamentally a reflection of the future (say 18 months) profitability (or earnings) of a company. Buying or selling shares, is a matter of judgement, and the share price goes up & down according to what people think, this is called paper profit/loss, as it's artificial. The only time real money changes hands is when a purchase of sale takes place.

hth

Daytona

Wow, what a wonderful response, thank you so much. There was no great expectation of much income from this relatively small amount of investment, it was just somewhere to put a few K to be cashed in if my brother needed any little treats etc. Not everyday living or anything like that, he is fine for general living expenses, bills etc, - just extras, so that the family don't have to spend on him if his tv breaks down, or he wants to go on holiday with others from his sheltered accommodation. Any interest was never taken out, just left in the pot. I've never done anything with it, I just get a statement every year, get depressed and forget it. However this year I want to at least stop someone eating away at the original investment. In fact my brother has never yet needed anything from it, but it's his money and I should protect it. The statement is due at the end of July and I may be worrying unnecessarily, perhaps it's gone up again, but it seems unlikely to have reached the capital initially invested.

It's in a moneybuilder from Fidelity -does that mean anything to you? Not doing a lot of building! My father had already had a lot to do with this company, but I'm not sure he knew an awful lot about investing to be honest, he had an illness that crept up very gradually so we didn't realise that his decisions were maybe not the best at the time.

their periodic bear markets (see the FTSE All Share Index chart, which is a reflection of what's happened to share prices

The value went up for a little while, but is now well below the original investment which was 5k

feel it's criminal that money has been stolen from a disabled person like this. Where has it gone? It must exist somewhere? Who is enjoying it?

Thanks, yes, rationally I realise this, but that money once existed in a physical sense and now it doesn't. Very aggravating!

Yes it does thank you so much, I can't think why I never asked before - this has been playing on my mind. Grateful for any further advice.

Liz

Think of it as if you've bought something (in this case you've indirectly bought shares in companies) and the current value is what you could sell it for if you sold it now. The "price" of anything is simply what someone else is prepared to pay for it - if something happens to make it less attractive then the "price" goes down.

The obvious analogy is buying a house - if you bought a property for £100k a few years ago and could sell it now for £150k, where would the £50k profit have come from? Similarly, if the housing market drops off over the next few months and you find you can only then sell it for £125k, where would the £25k "loss" have gone?

Thank you. The actual fund is the uk Index one, which you say would be a good choice. I appreciate that all investments are doing badly at the moment and now really just want to protect as much of the remaining money as I can. I couldn't bear it if the capital dropped any lower, all I want to do is store it somewhere, and any interest would be a bonus but not that important. Again on 3-4k there wouldn't be that much anyway. And yes, my father had a lot of faith in Fidelity, they always seem helpful when I ring them.

Many thanks again

Liz

But it wouldn't be an actual loss would it? You could at least get back the price you paid for it, so would've still made a 25k profit. But I understand what you're saying, even that 25k would have had to have come from some poor person's pocket and they would've had to pay what the market demanded, a completely fictitious amount totally unrelated to the real value of the house, bricks mortar decking etc! In this case it's the loss of the actual original capital that makes me feel very naively that someone has stolen it. Lack of any interest doesn't matter, it's the original money that my father carefully saved and arranged to make easily available to his disabled son so the rest of the family wouldn't have to worry about paying for his holidays etc. - that's what gets me about it.

Shouldn't get emotions mixed up with high finance I reckon!!!

thanks for helping to clarify all this for me. Really helpful

Liz

The basic question with shares is how much risk you can take, i.e. how bad it is if the value goes down (as it has). In this case, from what you say, it isn't really a disaster because the money is not vital for your brother, so probably investing in shares is not unreasonable. Shares go up and down, as all the advertising says (in the small print), there is a good chance - but not a certainty - that if you keep the investment for, say, another five years it will be worth more than the original cost. On the other side there is your peace of mind, if you feel anxious about seeing the value go down then you might feel you want to switch to some kind of savings account. However, the interest you will get at the moment is not very high, probably the best you could do is a cash ISA which might get you a bit less than 4% after the latest rate cut.

Be careful to check the details though, there are some similar-sounding products where you can lose money if stockmarkets do badly enough. Also those sort of bonds are often locked in for five or six years, and you may lose if you withdraw early, which may not be what you want.