Just don't stake your kids' education on it.i.berwick independent.co.uk. IF YOU aren't put off by the mouthful of a title then zero dividend preference shares (thankfully known as "zeros") can be a very useful investment. They pay a fixed rate of interest and carry a lower risk profile than equities.But financial advisers and fund managers face an uphill struggle to persuade new investors to brave the topsy-turvy markets, while the more experienced armchair investors are holding off because they want to buy shares at absolutely rock-bottom prices. That day may still be some way off, despite the FT-SE 100 index having lost 24 per cent of its value since its high point in July.If you fancy a long-term punt, there are bargains to be had. And many home owners have endowment mortgages with only a hazy idea of what that means. In fact an endowment policy is invested in a "with-profits" fund, meaning an investment fund made up of shares plus other, less volatile, investments.Most people realise there's no point in cashing in a stock market investment at the moment.The only exodus, according to PEP discount broker Financial Discounts Direct, is a move from equity-based PEPs into corporate bonds In effect, these are IOU notes issued by large companies. Millions of individual investors have bought into the American Dream through shares, but if they need to cash them in now - to send a child to college, for example - the dream will be shattered. Even if you keep your savings firmly locked away in the building society, you are exposed to the markets in other ways You probably pay into a pension That's invested on the stock market.

The UK dropped its interest rates, but not by enough to satisfy the City The talk is of a global economic downturn. And we are now less than three months away from kick-off for the European single currency on 1 January 1999. All of this is going to have an effect on our personal financial health. And it's more serious this time than during the last recession, or even the 1930s slump, because many more of us are shareholders. In the UK around 30 per cent of our savings is now invested on the stock market.

We're still way behind the US, where earlier this year the amount of money invested in mutual funds (their equivalent of unit trusts) overtook the amount of savings held on deposit for the first time. We cannot give personal replies, or guarantee to answer letters We accept no legal responsibility for advice given.. IT'S BEEN another doom-laden week on the stock market, with the promise of more to come. If you cannot decide what is best, consider paying a fee for advice from a pensions specialist. Try the Society of Pensions Consultants on 0171-353 1688.Write to the personal finance editor, Independent on Sunday, 1 Canada Square, Canary Wharf, London E14 5DL, and include a phone number; or fax 0171-293 2096; or e-mail i.berwick independent.co.ukDo not enclose SAEs or any documents you wish to be returned. The other may be paid in addition to Serps, so the basic formula for working out the pension is likely to be less generous.But even if the two schemes are identical, the new scheme is still likely to offer fewer years' membership People typically move to higher paid jobs. X per cent of a year's salary in a higher paid job is worth more than X per cent in a lower paid job.For the transfer value to be worth the same in money terms, you will earn fewer years in the new scheme.

But, if you expect to have big pay rises in your new job, perhaps through promotion, your transferred money's real worth will eventually be greater in the new scheme.Confused? You've every right to be Get details of the benefits from both schemes. This could be due in part to different formulas for working out the pension, for instance, a pension scheme that pays you a 60th of your year's salary for each year of membership is worth more in money terms than one that pays an 80th There may be other complications One scheme may be contracted out of the state Serps pension. Should I consider transferring the old pensions scheme to the new one? Both are final salary schemes.DS, ESSEXIn theory, the transfer value from your old scheme money should produce the same pension income at retirement as you are giving up in the old scheme and would get from your new employer's scheme. But actuaries for both schemes make all sorts of assumptions about investment returns and inflation, which may, in practice, prove to be incorrect.The chances are that the new scheme will give your transfer value fewer years' membership, than the years you belonged to the old scheme. This tax saving could be less than the extra PEP/ISA charges you may incur.Pension transferA year ago I started a new job and joined the pension scheme I also belonged to the pension scheme in my old job. You'll pay no capital gains tax on PEP investments, but most investors do not make sufficient capital gains to pay capital gains tax. Income tax on dividends is the main tax saving: it's worth more to a higher- rate tax payer.For basic-rate tax payers the income tax saving is halved next April from 20 per cent to 10 per cent.