Q As costs for attending university are likely to rise in the future, I want to start planning now for our two children, aged five and seven. What sort of costs would be involved and how should we best save?

A Forecasting future costs when things are changing so radically is fairly difficult, but if we start at the beginning and assume that both children attend for three years. This means that you will have to find six lots of annual "costs". If we take each annual "cost" to be say £3,000, you then need to have a guess at what inflation might be over the next decade or so. At 3.5 percent, then the total amount of money required would be about £28,000.

You could look at a regular savings unit trusts or investment trusts, currently these could be incorporated into PEPs and ISAs next year, but as they are normally linked to the stock market you would have to be careful when the time the money is needed approaches in case the market fell. Traditional methods such as Endowment policies still offer good value for money over longer periods and they could be set up to mature at specific dates when the cash is needed.

Turning to how much you should be saving, any quotations will depend on the investment vehicle used and what projected growth rates are used and should be used to give you a very rough guide. You need to consult an Independent Financial Adviser who will be able to work out costs for your own circumstances.

Readers can obtain a free factsheet entitled 'Thinking About Education' by ringing 01484 860123.

Q I am looking to invest a lump sum into a PEP but don't really know which one to choose as there seems to be so many. Have you any ideas?

A There are over 500 to sort through so knowing where to start is the first thing. You need to consider whether you are looking for capital growth or immediate income. This will determine whether you should get a Corporate Bond PEP or an Equity based one. If growth is your main aim, then you could look at whether or not you want one with a money back safety net or not, one that tracks the stock market index, or one where the fund manager will try to outperform the index by picking the right stocks.

A further consideration will then be how adventurous you wish to be and whether you want to invest in the UK or overseas. Once you have narrowed the choice down, you can then look at a suitable fund manager for that type of PEP plan. Here you would be looking perhaps at a proven track record and perhaps charges although this should really be low on your priority list as cheap costs don't necessarily mean good value in the long term for an actively managed fund.

You should consult an Independent Financial Adviser who will help you choose the correct PEP for your circumstances.

Q I have a PEP with my bank and each year they tell me how much it is worth. Is there anywhere I can find out how it compares with other companies' funds?

A It is always important to keep an eye on how well your investments are doing because performance can vary a great deal. Longer periods give a better overall view and if your fund has under-performed for several years then it may well be worth moving the money to another provider. Tables are published from time to time which compare different companies over certain time periods and can be found in publications such as Money Management.

Q I have £7,000 in a building society account which pays me 3.35 per cent interest but I have to give three months' notice. Are there any better instant access accounts around because I may need some of the money in a hurry?

A There certainly are and it pays to shop around. The best rates from the major banks and building societies for this sum on an instant access account are around seven percent and it is definitely worth giving notice to move your money. At the moment your money is struggling to beat inflation. You do need to check if there are any restrictions on the number of withdrawals and so forth.

Q My daughter pays a small amount each month into a personal pension plan. I want to make a contribution on her behalf as I am concerned about her future. I have tried to encourage her to pay more, but there always seems to be something more pressing for her money. Am I allowed to do this, preferably as a lump sum?

A Most personal pensions let you invent a lump sum normally subject to a minimum of about £500 gross. However, because contributions must be made either by the individual or an employer, depending on how much is involved, the money ought to be gifted to your daughter and then sent in her name. Remember that the total contributions must not exceed her annual allowance under Inland Revenue rules.

Q I have had private health insurance for the last six years, and the cost has been steadily rising. Two years ago I had a minor operation which they paid for but this year the premium has gone up a lot. Will there be a problem if I change companies?

A It is certainly worth shopping around as prices vary widely. As regards your previous claim, then you may find that any recurrence of such a problem might be excluded by any new company for a certain length of time. I suggest you contact an Independent Financial Adviser who will be able to assist you. For more information call 01484 860123.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.