Advice Please - Planning for Future - LISA AND ISA

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FIRSTTIMER
FIRSTTIMER Posts: 637 Forumite
in Savings & investments
Hi,


Currently 33 and I am planning my future savings and wanted some advice. I have approx. £10k in cash savings and also no debts. I am looking to save approx. £600 a month long term from the new tax year onwards. As I have cash savings to access if needs be, I am looking at doing the following instead for better growth....


£300 a month in a S&S LISA - long term investment that I will access at 60.
£300 a month into a normal S&S ISA - one that I can access immediately and withdraw if needs be.


Has anyone any advice on both. I really want both products to be those funds/investment/features which have minimal fees and are managed on my behalf as I really haven't got the time to keep moving money monthly to keep maximising my returns - can anyone advice on the best options/products.


I have been looking at AJ Bell/Charles Stanley and Cavendish/HL - but could do with some MoneysavingExpert input!!
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  • Alistair31
    Alistair31 Posts: 946 Forumite
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    What is your pension situation ?
  • FIRSTTIMER
    FIRSTTIMER Posts: 637 Forumite
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    Company pension. Defined benefit. Retiring around 60-65 I reckon.
  • FIRSTTIMER
    FIRSTTIMER Posts: 637 Forumite
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    From researching this evening....and the FCS Protection Rules.


    I am thinking MoneyFarm for one of them and Nutmeg for the other....
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
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    FIRSTTIMER wrote: »
    Hi,


    Currently 33 and I am planning my future savings and wanted some advice. I have approx. £10k in cash savings and also no debts. I am looking to save approx. £600 a month long term from the new tax year onwards. As I have cash savings to access if needs be, I am looking at doing the following instead for better growth....


    £300 a month in a S&S LISA - long term investment that I will access at 60.
    £300 a month into a normal S&S ISA - one that I can access immediately and withdraw if needs be.


    Has anyone any advice on both. I really want both products to be those funds/investment/features which have minimal fees and are managed on my behalf as I really haven't got the time to keep moving money monthly to keep maximising my returns - can anyone advice on the best options/products.


    I have been looking at AJ Bell/Charles Stanley and Cavendish/HL - but could do with some MoneysavingExpert input!!

    You shouldn't be looking at an S&S investment as money that you can draw on in any kind of short term timeframe. That is what your cash holdings are for, and at £10,000 they seem quite healthy.

    Assuming you have a pension into which you are putting a sizeable sum of money, e.g. at least 15% of salary as a combined contribution from you and your employer, then making use of a LISA for additional pension is not a bad idea, given the 25% bonus. At 300 per month you are just short of the maximum LISA contribution, so I'd up the LISA contribution to the maximum and take advantage of the maximum bonus.

    Rather than look at platforms in the first instance, it would be more sensible to identify the funds that you wish to invest in and then look at where you can get get them for the cheapest price. Have you considered what those funds might be?
  • FIRSTTIMER
    FIRSTTIMER Posts: 637 Forumite
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    Hi,


    Thanks for this - I am contemplating splitting the 600 into more into the LISA and then the rest into a S&S ISA. I agree around the withdrawal, however I mean in an absolute emergency situation.


    In terms of fund - this is the issue - I am non the wiser, I am ideally looking for the cheapest fully managed multi fund with the least charges and one that doesn't charge for monthly deposits/emergency withdrawal/transactions but also gives the best return. Hence why googling Nutmeg and Moneyfarm seem to come up as the best fully managed with minimal costs?
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
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    FIRSTTIMER wrote: »
    Hi,


    Thanks for this - I am contemplating splitting the 600 into more into the LISA and then the rest into a S&S ISA. I agree around the withdrawal, however I mean in an absolute emergency situation.


    In terms of fund - this is the issue - I am non the wiser, I am ideally looking for the cheapest fully managed multi fund with the least charges and one that doesn't charge for monthly deposits/emergency withdrawal/transactions but also gives the best return. Hence why googling Nutmeg and Moneyfarm seem to come up as the best fully managed with minimal costs?

    Nutmeg and Moneyfarm are quite expensive compared to a multi-asset fund (like Vanguard LifeStrategy, HSBC Global Strategy, Blackrock Consensus or L&G Multi Index) held on a different platform. Have a read of the information about these different funds and then post back with any questions about them.
  • FIRSTTIMER
    FIRSTTIMER Posts: 637 Forumite
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    I was actually looking at Vangaurd 60 but couldn't quite determine the costs associated and the potential growth performance. I do not want to have to pay as a regular saver. Although the 0.3% annual costs seem MUCH cheaper than the Nutmeg/MoneyFarm that I had looked at.
  • Lungboy
    Lungboy Posts: 1,953 Forumite
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    I think the cheapest you can get Vls60 is on Vanguards own ISA and it's total cost is 0.37% (0.22% for the fund and 0.15% for the platform).
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
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    FIRSTTIMER wrote: »
    I was actually looking at Vangaurd 60 but couldn't quite determine the costs associated and the potential growth performance. I do not want to have to pay as a regular saver. Although the 0.3% annual costs seem MUCH cheaper than the Nutmeg/MoneyFarm that I had looked at.

    The costs partly depend on the platform that you use. For a LISA your choices are limited to AJ Bell (who charge 0.25%, plus £1.50 every time you buy or sell) or Hargreaves Lansdown (who charge 0.45%). Add those charges to the Vanguard fund charges and you have your total cost. Be aware, however, that the fund charges are simply factored into the values, so you will only ever make an actual payment for the platform fees. Making monthly deposits would add £18 a year to the AJ Bell charges, so HL may be a better option, but you'd need to do the sums to be sure.

    For an ISA, the cheapest way to hold Vanguard funds is through their own platform: Vanguard Investor. They only charge 0.15% on top of the fund charge with no other charges.
  • FIRSTTIMER
    FIRSTTIMER Posts: 637 Forumite
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    The LISA costs are therefore looking at around 0.6-0.75 total cost same as nutmeg and moneyfarm


    Vangaurd is looking at 0.15 plus 0.22 for the S&S ISA
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