Your money queries answered by Peter Rutherford, chief executive of Rutherford Wilkinson plc, independent financial advisors. Mrs J B from Cramlington asks: When my daughter finishes university in the summer she will have built up a student loan of about £8,000. She has some savings in a cash Isa, which will cover part of the loan. Do you think she should repay as much as she can or keep the money in the Isa? Answer: From September 1 last year through to August 31 this year, the rate of interest charged on student loans is 3.2% so, as the Isa is tax-free, she may be getting a better return on the Isa. If so, it would make sense to maybe keep the Isa but this should be reviewed each September. If your daughter gets a job and earns in excess of £15,000 per annum, she will be required to start repaying some of the loan at a rate of 9% of earnings in excess of £15,000 commencing in April 2007. Mr W M from Heaton asks: My wife has not worked for the last few years as she has remained at home to bring up our children. So she has not contributed to a pension scheme. What can she do? We're also concerned about how her state pension will be affected. Answer: Even if your wife has no earned income, if you have the available capital she could invest up to a maximum of £2,808 into a stakeholder or personal pension each year. This would be regarded as a net contribution, so the pension provider you select will then effectively collect an additional £792 being the basic rate tax relief you are entitled to from the Inland Revenue, thereby investing £3,600 on your behalf. Do not worry about her basic state pension as, whilst she remains at home bringing up the family, she's entitled to home responsibilities protection, which will give her credits each year towards the basic state pension. An independent financial adviser can give you further guidance on both these issues. Mr T M from Durham asks: Despite numerous reminders from me and my wife, our daughter has still not done anything with her child trust fund voucher of £250 that she received almost a year ago. I have read in your column before that eventually it will automatically be invested, but where? Answer: The Treasury has selected at least 11 organisations that they will use as default providers for the CTF. Although take-up rate has improved recently, it is still anticipated that there will be something like 600,000 default accounts to be opened and these will start to be opened 12 months after the date of issue, commencing in March. It would obviously be preferable for your daughter to select a provider of her choice but, even if the money is placed with a default provider by the Treasury, she will be able to switch it to another company later. Ideally, your daughter should take independent advice to select a suitable scheme. * Investors Guide is available free to readers. For a copy, freephone (0800) 074-5489 or write to me at Rutherford Wilkinson Plc, 21-23 Bridge Street, Morpeth, Northumberland, NE61 1NT. Please also write with queries you want answered. Rutherford Wilkinson Plc is authorised and regulated by the Financial Services Authority. | 
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