S&S ISA recomendations

Mercenary Keyboard Warrior · 19 Nov 2019 at 13:33

Decided that for 2020/21 I am going to open a S&S ISA

I never used a S&S ISA before, always had cash, then went to IFISA.
With the state of IF I am thinking to move to S&S next year.

I was wondering if anyone has any specific recommendations and why.

Thanks

Street · 19 Nov 2019 at 13:38

I tend to recommend the Vanguard LifeStrategy funds. They have a range of options depending on how risk averse you are, the fees are low and they are straightforward to use. I'm no IFA though so if it goes **** up, it's on you!

I had a few different funds but ended up consolidating them all into Vanguard which meant I was paying less fees and generally my returns were better.

Mercenary Keyboard Warrior · 19 Nov 2019 at 13:40

Street said:
I tend to recommend the Vanguard LifeStrategy funds. They have a range of options depending on how risk averse you are, the fees are low and they are straightforward to use. I'm no IFA though so if it goes **** up, it's on you!

I had a few different funds but ended up consolidating them all into Vanguard which meant I was paying less fees and generally my returns were better.

Thanks, just looking for options so will give this a look to start.

rawuk · 19 Nov 2019 at 13:49

I would echo Street if you're not into spreadsheets and tracking the market go for a managed fund or a model portfolio. The main mistake a lot of new investors make is they invest in high risk areas, which require monitoring, and get burned. Going for a managed fund reduces the downside. Although you are unlikely to achieve higher than the average if you invest solely in trackers as they are just that. Trackers. Usually achieving slightly below their sector average. This is still historically way better than deposits so definitely worth dipping your toes into for medium term holds

Shure · 19 Nov 2019 at 16:14

Vanguard Lifestrategy if you want a heavy UK bias or the Global All Cap for more US weighting.
Which Lifestratgy depends on risk and time in the market etc e.g. for my daughter I've gone LS100 as itll be there for around 20 years+.
For my own investments I've gone Global All cap.

Mercenary Keyboard Warrior · 19 Nov 2019 at 16:52

Thanks, had a quick look at Vanguard, and realised that as i am now not going to be using all my allowance this year for my IFISA I can actually take out a lifetime iSA as well.
I actually turn 50 in 20/21 tax year so i can dump £4k per year for 2 tax years and it will in effect become £10k. Have to keep it 10 years then which is close enough that I am sure I could hold out, if not suffer the 25% penalty, is no massive issue as I would have been given 20% of it anyway.

I need to see if Vanguard will support one as I would already be looking at a lifetime and a normal S&S ISA.

I would definatly be looking at Trackers. I am used to them as I choose them for my pension so quite happy to work with them.

DOH of course I cant start a lifetime ISA now, forgot that, thats why I dismissed it before

rawuk · 19 Nov 2019 at 17:24

Knowing your age my only other comment would be to look at a Pension rather than ISA for long term saving.

Scam · 19 Nov 2019 at 17:46

Mercenary Keyboard Warrior said:
I actually turn 50 in 20/21 tax year so i can dump £4k per year for 2 tax years and it will in effect become £10k. Have to keep it 10 years then which is close enough that I am sure I could hold out, if not suffer the 25% penalty, is no massive issue as I would have been given 20% of it anyway.

The 25% penalty on the LISA is a real ****stain. It's 25% on your balance (including the bonus) which means say for example you put £8k in (two years max), get the £2k bonus, then your circumstances change.. To get at that money you'd pay 25% penalty of the full £10k which is £2,500. That means for all your saving you've actually lost £500. If you did that and after 3 years it'd be a £750 loss, etc. etc. If you're a FTB like me in London/the South then you might be looking at properties bordering on the stupid £450k limit. If your circumstances change for the better, you are effectively penalised for it.

Mercenary Keyboard Warrior said:
DOH of course I cant start a lifetime ISA now, forgot that, thats why I dismissed it before

Yup.

Mercenary Keyboard Warrior · 19 Nov 2019 at 18:51

rawuk said:
Knowing your age my only other comment would be to look at a Pension rather than ISA for long term saving.

Thanks but already got 4 figure sums going into that per month, and what I am doing is pulling cash out of P2P looking for a better home for now

Zirax · 20 Nov 2019 at 22:39

Mercenary Keyboard Warrior said:
Thanks but already got 4 figure sums going into that per month, and what I am doing is pulling cash out of P2P looking for a better home for now

I've got a couple of Vanguard investments on the go. However I think you should look up what is happening in the global economy before going too hard in s&s. Especially on the bond and credit markets. If you have and are happy with the risks then go for it.

Mercenary Keyboard Warrior · 21 Nov 2019 at 08:25

Zirax said:
I've got a couple of Vanguard investments on the go. However I think you should look up what is happening in the global economy before going too hard in s&s. Especially on the bond and credit markets. If you have and are happy with the risks then go for it.

Thanks, always good to get views. I am pulling from P2P and one of the main reasons for that is how I see the economy, not just globally but Uk as well.
I wont be putting all my eggs in the S&S basket, going to open up a cash ISA as well, despite them being sucky right now. I bought a new house a few years ago so liquid assets hasnt been that high, but its starting to build up again now, so I am starting to think about it again properly.

The cash ISA will have to be flexible, I will be depositing and then withdrawing start of next tax year, it wont really contain any real cash for most of the year, just long enough that annually I keep the amount available.
Next year I would probably go 50/50 between S&S and cash.
The cash ISA is really for switching to S&S later when we do get a crash.

Kermit said:
Don't know much about S&S ISA's but opened myself and the Mrs a Nutmeg S&S ISA a few years ago and we both put in a reasonable amount each month and so far no complaints, the app works well to monitor the ups & downs (tends to update ~5.30pm each work day and I'm addicted to checking it lol) but all seems good so far and as they state in any S&S based investment T&C's performance in the past is often no guarantee of performance in the future so go with one, and hope they're do good or at least not bad.

One thing to consider for a bonus is to check Quidco for some cash back. iirc myself and the Mrs got £150 each within 3 or 4 months for starting ours via Quidco putting in £150/300 a month respectively (I now put in more) and while Nutmeg at present only offering £100, its £100 for free if your going to go with them anyway or perhaps Shepherds Friendly with up to £305 cash back at present depending on initial lump sum.

Hmm could be worth a look at them as well. I don't use quidco, I looked briefly at topcashback but didn't see anything that too my fancy, good tip will take a look there as well.

booyaka · 21 Nov 2019 at 08:39

For a Balanced approach - if you decide to use Vanguard,

Shure said:
Vanguard Lifestrategy if you want a heavy UK bias or the Global All Cap for more US weighting.
Which Lifestratgy depends on risk and time in the market etc e.g. for my daughter I've gone LS100 as itll be there for around 20 years+.
For my own investments I've gone Global All cap.

LifeStrategy® 60% Equity Fund is not heavy UK Bias - current geographical split is

United States 45.05
United Kingdom 23.30
Eurozone 7.63
Japan 6.48
Asia - Emerging 4.28

But I would agree that a split of funds between LifeStrategy® 60% Equity Fund & Global Balanced fund is a good starting route for anyone using Vanguard who has a balanced attitude to risk. Costs is also around 0.35% for those two funds if split 50/50. (0.22% for lifestrategy and 0.48% for global balanced) - you are also getting a passive fund and an active fund so blending different styles of investment management.

(disclaimer - none of the above information constitutes a recommendation or advice, it's simply providing information)

Mercenary Keyboard Warrior · 21 Nov 2019 at 08:41

booyaka said:
For a Balanced approach - if you decide to use Vanguard,

LifeStrategy® 60% Equity Fund is not heavy UK Bias - current geographical split is

United States 45.05
United Kingdom 23.30
Eurozone 7.63
Japan 6.48
Asia - Emerging 4.28

But I would agree that a split of funds between LifeStrategy® 60% Equity Fund & Global Balanced fund is a good starting route for anyone using Vanguard who has a balanced attitude to risk. Costs is also around 0.35% for those two funds if split 50/50. (0.22% for lifestrategy and 0.48% for global balanced) - you are also getting a passive fund and an active fund so blending different styles of investment management.

(disclaimer - none of the above information constitutes a recommendation or advice, it's simply providing information)

Thanks

Looks like advice to me

Actually when I and my solicitor mate now say to people (Im an accountant) is that we make observations on a situation but its not advice