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  • FIRST POST
    • Pipz
    • By Pipz 19th Mar 17, 11:49 AM
    • 90Posts
    • 59Thanks
    Pipz
    Advice - Stocks and Shares ISA
    • #1
    • 19th Mar 17, 11:49 AM
    Advice - Stocks and Shares ISA 19th Mar 17 at 11:49 AM
    Hi all,

    Just after a little advice - I've overpaid my mortgage this year and have an established an emergency fund - I'm looking to contribute to an S&S ISA.

    Ideally I'd like to invest to a fund that pays income monthly so that I have the flexibility to deploy received funds as need dictates.

    In reality I'll end up reinvesting in the same fund.

    I wondered if this strategy would have an adverse effect on my ISA allowance or incur unnecessary charges.

    TIA.
    Fortior quo paratior
Page 1
    • Eco Miser
    • By Eco Miser 19th Mar 17, 12:05 PM
    • 3,178 Posts
    • 2,942 Thanks
    Eco Miser
    • #2
    • 19th Mar 17, 12:05 PM
    • #2
    • 19th Mar 17, 12:05 PM
    So long as the money doesn't leave the ISA wrapper, it won't impact your ISA allowance, and if you choose a platform that doesn't charge for fund transactions you won't incur unnecessary charges (unless you could otherwise have had a cheaper fixed fee platform).

    However, not many funds pay monthly income, and restricting yourself to those that do seems unnecessarily limiting, since those funds will be targeted at people who need a monthly income, which you don't.

    Do you intend to contribute monthly, or just lumps sums as and when you have them available?
    Eco Miser
    Saving money for well over half a century
    • Pipz
    • By Pipz 19th Mar 17, 12:15 PM
    • 90 Posts
    • 59 Thanks
    Pipz
    • #3
    • 19th Mar 17, 12:15 PM
    • #3
    • 19th Mar 17, 12:15 PM
    The current plan is to pay in a fixed amount each month -with any additional disposable income for that month paid in after that.
    Fortior quo paratior
    • AnotherJoe
    • By AnotherJoe 19th Mar 17, 12:16 PM
    • 7,599 Posts
    • 8,196 Thanks
    AnotherJoe
    • #4
    • 19th Mar 17, 12:16 PM
    • #4
    • 19th Mar 17, 12:16 PM

    Ideally I'd like to invest to a fund that pays income monthly so that I have the flexibility to deploy received funds as need dictates.

    In reality I'll end up reinvesting in the same fund.

    I wondered if this strategy would have an adverse effect on my ISA allowance or incur unnecessary charges.

    TIA.
    Originally posted by Pipz
    No, but a better plan especially if you plan to reinvest in the same fund would be to invest in an accumulation fund.

    Should you wish to take any income out of the ISA or invest it elsewhere inside, just sell some units.

    As said by EcoMiser, to make it worse, a monthly paying fund will be very restrictive since there arent many and most likely give you a poorly performing fund to boot.
    Last edited by AnotherJoe; 19-03-2017 at 12:25 PM.
    • picks
    • By picks 19th Mar 17, 4:39 PM
    • 181 Posts
    • 67 Thanks
    picks
    • #5
    • 19th Mar 17, 4:39 PM
    • #5
    • 19th Mar 17, 4:39 PM
    However, not many funds pay monthly income, and restricting yourself to those that do seems unnecessarily limiting, since those funds will be targeted at people who need a monthly income, which you don't.
    Originally posted by Eco Miser
    I would suggest to anyone wanting monthly income from a fund could instead split their investment into three funds which pay quarterly income. Just make sure that the pay day for each of the three falls in a different month.
    • novice_1
    • By novice_1 19th Mar 17, 6:26 PM
    • 11 Posts
    • 4 Thanks
    novice_1
    • #6
    • 19th Mar 17, 6:26 PM
    • #6
    • 19th Mar 17, 6:26 PM
    Instead of limiting yourself to those paying a monthly dividend, just invest in an accumulator and sell out as/when you need. Over the long term, talking averages, you should see a monthly increase in the capital value.
    • Pipz
    • By Pipz 19th Apr 17, 6:07 AM
    • 90 Posts
    • 59 Thanks
    Pipz
    • #7
    • 19th Apr 17, 6:07 AM
    • #7
    • 19th Apr 17, 6:07 AM
    Thanks for the advice.

    My next question (and I appreciate this will vary between users) is which funds/platform is recommended for and individual with little experience in investing should go with?

    I've made a start at researching with MSE's guide and trying to pick up info from this forum and currently Cavendish Online seems a good option as it gives access to Fidelity (which I think is a fund?).

    Having browsed online - I can see that Cavendish makes up a mock portfolio with varying percentages attributed to different funds within a portfolio. Whilst I understand the importance of diversification does that apply to funds within a platform or is a better approach to subscribe to different platforms as well (one per Tax year ofc).

    TIA.
    Fortior quo paratior
    • AnotherJoe
    • By AnotherJoe 19th Apr 17, 7:51 AM
    • 7,599 Posts
    • 8,196 Thanks
    AnotherJoe
    • #8
    • 19th Apr 17, 7:51 AM
    • #8
    • 19th Apr 17, 7:51 AM
    Why would different platforms make any difference ? It's the investments that grow (or diminish), the platform is just a container. The only thing having several containers will do is make it more complex and almost certainly more expensive.
    • economic
    • By economic 19th Apr 17, 8:29 AM
    • 1,894 Posts
    • 1,041 Thanks
    economic
    • #9
    • 19th Apr 17, 8:29 AM
    • #9
    • 19th Apr 17, 8:29 AM
    Why would different platforms make any difference ? It's the investments that grow (or diminish), the platform is just a container. The only thing having several containers will do is make it more complex and almost certainly more expensive.
    Originally posted by AnotherJoe
    isnt it a good idea to spread investments across a couple of platforms in case one goes bust? at least when the size becomes large enough to move to another platform.
    • AnotherJoe
    • By AnotherJoe 19th Apr 17, 8:36 AM
    • 7,599 Posts
    • 8,196 Thanks
    AnotherJoe
    Only if you are ultra paranoid because the funds aren't held in the platforms name so if they went bust someone else would take over the admin and tehnfunds would still be in the investors name not the platforms.
    It would require a scam larger than Madoff to abscond with the money. . Maybe it's something the OP can worry about when their ISA gets to £50k.
    • AlanP
    • By AlanP 19th Apr 17, 8:45 AM
    • 960 Posts
    • 679 Thanks
    AlanP

    I've made a start at researching with MSE's guide and trying to pick up info from this forum and currently Cavendish Online seems a good option as it gives access to Fidelity (which I think is a fund?).

    Having browsed online - I can see that Cavendish makes up a mock portfolio with varying percentages attributed to different funds within a portfolio. Whilst I understand the importance of diversification does that apply to funds within a platform or is a better approach to subscribe to different platforms as well (one per Tax year ofc).

    TIA.
    Originally posted by Pipz

    Fidelity isn't a fund in this context, it is the platform. Cavendish act as your Execution Only Broker in effect and use the Fidelity platform for the transactions.

    They have done a deal with Fidelity to market their product and have negotiated a deal that typically means it is cheaper to use them than go to Fidelity direct.

    Fidelity also offer their own range of funds so it can be confusing when you first look. These are on offer via Cavendish/Fidelity as are
    plenty of others.
    • Pipz
    • By Pipz 19th Apr 17, 9:49 PM
    • 90 Posts
    • 59 Thanks
    Pipz
    Thanks for the info - my initial venture (a while ago) was with Virgin money which was a much simpler affair. I'm trying to get a feel for what's available before investing.
    Fortior quo paratior
    • xylophone
    • By xylophone 19th Apr 17, 10:15 PM
    • 23,451 Posts
    • 13,634 Thanks
    xylophone
    http://www.telegraph.co.uk/investing/funds/the-cheapest-index-tracker-funds---and-the-trick-to-cutting-cost/

    http://forums.moneysavingexpert.com/showthread.php?t=5583030&highlight=snowman+spreads heet

    might be worth a look.
    • enthusiasticsaver
    • By enthusiasticsaver 19th Apr 17, 11:34 PM
    • 4,677 Posts
    • 8,853 Thanks
    enthusiasticsaver
    isnt it a good idea to spread investments across a couple of platforms in case one goes bust? at least when the size becomes large enough to move to another platform.
    Originally posted by economic
    The money is invested in funds not the platform. If the platform goes bust you still have the investment.
    4 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • george4064
    • By george4064 20th Apr 17, 8:11 AM
    • 857 Posts
    • 911 Thanks
    george4064
    Check www.monevator.com for lots of information on portfolio construction and comparison table for ISA platforms.
    "If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
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    • Pipz
    • By Pipz 23rd Apr 17, 8:31 AM
    • 90 Posts
    • 59 Thanks
    Pipz
    Thank you
    Fortior quo paratior
    • Pipz
    • By Pipz 29th Jun 17, 6:07 AM
    • 90 Posts
    • 59 Thanks
    Pipz
    Greetings all,

    Having done limited research I aim to subscribe to the VLS suite of funds this weekend (specifically VLS20/60/100) paying £100 a month into each fund (if disposable permits).

    I had considered contributing to a Lifetime ISA through H&L fr retirement purposes (my current status - basic rate taxpayer, current member of LGPS, homeowner) but was somewhat unsure if it was advisable versus putting the same money into a private pension.

    If I have any residual after that I had thought of contributing to an innovative ISA through Zopa (I have invested with them in the past) as aside from the minimum £1K initial investment, I believe you can drip random amounts into it.

    Does anyone spot anything alarming in this idea?

    TIA
    Fortior quo paratior
    • AnotherJoe
    • By AnotherJoe 29th Jun 17, 6:41 AM
    • 7,599 Posts
    • 8,196 Thanks
    AnotherJoe
    Yes, why would you invest in three different VLS variants ? In the proportions you mention it's the same as just buyinging vls60
    • bowlhead99
    • By bowlhead99 29th Jun 17, 7:02 AM
    • 6,896 Posts
    • 12,406 Thanks
    bowlhead99
    Having done limited research I aim to subscribe to the VLS suite of funds this weekend (specifically VLS20/60/100) paying £100 a month into each fund (if disposable permits).
    Originally posted by Pipz
    As Joe said it makes no real sense to invest separately in those three funds in equal proportions as you would get broadly the same exposure to underlying assets as just investing in the middle one. On a technical point that makes very little practical difference I could understand someone using a mix of 20 and 100 instead of 60, if they could be bothered with the hassle of manually rebalancing it frequently, but not using 20 and 60 and 100 all at once in the same ISA.

    I had considered contributing to a Lifetime ISA through H&L fr retirement purposes (my current status - basic rate taxpayer, current member of LGPS, homeowner) but was somewhat unsure if it was advisable versus putting the same money into a private pension.
    The underlying investment choices with LISA and pension will be basically the same.

    As a basic rate taxpayer you won't get a better 'bonus' from tax relief with a personal pension than you could get from the LISA, and you have more flexibility on when to draw chunks of cash out of a LISA (because no tax ever payable) whereas when you draw a private pension a large proportion of it will be taxable, so you have to consider your available personal tax allowances in the years before your workplace and state pensions kick in, and manage the timing carefully to avoid paying tax on it. There are pros and cons you can read up on, on lots of other threads.

    If I have any residual after that I had thought of contributing to an innovative ISA through Zopa (I have invested with them in the past) as aside from the minimum £1K initial investment, I believe you can drip random amounts into it.
    Zopa doesn't seem particularly attractive for the risk involved when you can get 5% zero risk on regular saving accounts on up to £500pm at Nationwide, M&S, First Direct etc. In terms of 'dripping random amounts' Nationwide don't care if you put £500 or £1 or £0 into their 'Flexclusive Regular Saver' account each month (obviously the more the merrier, given the nice interest rate) and it is instant access.
    Last edited by bowlhead99; 29-06-2017 at 7:05 AM.
    • Pipz
    • By Pipz 1st Jul 17, 8:34 AM
    • 90 Posts
    • 59 Thanks
    Pipz
    Thank you - I wasn't overly sure if the different VLS variants contained different asset mixes or if they were simply the same assets but in varying proportions of bonds and equity.

    On reflection I'll look at some of the other funds to spread things a little further.

    I believe that if I open an S&S ISA with Vanguard then all my subscriptions this year are limited to them but I can open a new S&S ISA with another provider in the new tax year.

    Am I correct that if I do open a LISA this year then that can be with a different provider (has to be as Vanguard don't offer one) as it's a different ISA type?
    Fortior quo paratior
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