Stocks and shares ISA

mothpop

I would really appreciate any opinions on this:

Earlier this year I openend my first S&S ISA by transferring a previous cash ISA and also investing more. My selected funds have done very well, but now I am getting worried about a downwards turn in the market so am thinking of selling.
Am I correct in thinking that in order to maintain 'ISA status' for this money it must remain in a S&S ISA? Also, if this is the case, has anyone any suggestions for a 'low risk' ISA fund?
Thanks in advance. :j

Aegis

mothpop wrote: »

I would really appreciate any opinions on this:

Earlier this year I openend my first S&S ISA by transferring a previous cash ISA and also investing more. My selected funds have done very well, but now I am getting worried about a downwards turn in the market so am thinking of selling.
Am I correct in thinking that in order to maintain 'ISA status' for this money it must remain in a S&S ISA? Also, if this is the case, has anyone any suggestions for a 'low risk' ISA fund?
Thanks in advance. :j

There should be a cash account held within your ISA for this sort of purpose. If in doubt call up your provider and ask them if you can sell and hold the funds within the ISA wrapper pending your further instructions.

Alternatively you could try to find a Sterling denominated liquidity/cash fund, as those seem to be about the lowest risk on offer. I'd prefer the first option though, especially if I was looking to reinvest at some point fairly soon.

Primrose

I think you can sell equities within an ISA and convert to cash temporarily but I'm unsure on how the cash sum is treated. Have a nasty feeling that any interest earned (and I assume some interest will be paid depending on the provider with whom it is held ?) will be taxed. Perhaps somebody who knows more on this will be able to clarify this point.

Lokolo

Primrose wrote: »

I think you can sell equities within an ISA and convert to cash temporarily but I'm unsure on how the cash sum is treated. Have a nasty feeling that any interest earned (and I assume some interest will be paid depending on the provider with whom it is held ?) will be taxed. Perhaps somebody who knows more on this will be able to clarify this point.

Yes it is and most don't give decent rate on the cash inside it anyway.

mothpop

Have been thinking about moving the money to a lower risk fund eg fixed interest trust that involves corporate bonds. Is this a stupid idea? - I am very new to this game so would appreciate any advice.

Lokolo

Corporate Bond funds are less risk but they are not no risk. Just lower risk!

angel253

Can anyone tell me anything about the Abbey Guaranteed Growth Plans? Or Stocks and Shares ISA's in general?

Parents have about £20k in old ISA's and £4000 lump sum to add now. Abbey are trying to sell them their Stocks and Shares ISA which boasts a minimum 14% return on their investment along with whatever growth is in their chosen option (stockmarket or property option) on a 5 1/2 year term.

Baldur

angel253 wrote: »

Can anyone tell me anything about the Abbey Guaranteed Growth Plans? Or Stocks and Shares ISA's in general?

Parents have about £20k in old ISA's and £4000 lump sum to add now. Abbey are trying to sell them their Stocks and Shares ISA which boasts a minimum 14% return on their investment along with whatever growth is in their chosen option (stockmarket or property option) on a 5 1/2 year term.

Are your parents prepared for the ups & downs and risks associated with investments, as opposed to low risk savings accounts where they receive interest?

Even if they are, they would be well-advised to avoid 'financial advisers' (basically salespeople) linked to high street banks/building societies - the range of products on offer tend to be very limited and of generally poor quality.

dunstonh

Can anyone tell me anything about the Abbey Guaranteed Growth Plans?

In a word....rubbish.

Easily beaten.

Or Stocks and Shares ISA's in general?

A stocks and shares ISA is just a tax wrapper. A container you can place around 50,000 investments into to make them tax free.

Parents have about £20k in old ISA's and £4000 lump sum to add now. Abbey are trying to sell them their Stocks and Shares ISA which boasts a minimum 14% return on their investment along with whatever growth is in their chosen option (stockmarket or property option) on a 5 1/2 year term.

Tell them to see a real financial adviser and not a bank sales rep with a really poor product range. Bank investment products are pretty awful generally. They are also typically the most expensive distribution channel and the one with the most mis-sales.

angel253

Thanks baldur and dunstonh,

pretty much what I expected to hear!!!

jamesd

angel253 for one alternative see this DIY guaranteed equity bond.

Today there's the 4.49% fixed rate for five years ISA from Nationwide. Add a FTSE 100 tracker fund in a stocks and shares ISA.

Put 87% into the fixed rate ISA and 13% into the FTSE 100 tracker. You get a guarantee of 11% growth even if the FTSE 100 drops to 0 value. If the FTSE stays the same you get 24% gain. If it increases 30% you get 27.8% gain. If it increases 50% you get 30.4% gain. If it increases 100% you get 36.9% gain.

If you don't think the FTSE will drop to less than 20% of its value then put 83% into the Nationwide fixed rate and 17% into the FTSE tracker. You get 6.7% if the FTSE drops to 20%. If it stays the same 23.7%. If it increases 30% you get 28.8%. If it increases 50% you get 32.2%. If it increases 100% you get 40.7%.

This provides similar results to the Abbey product but you get instant access to the FTSE100 part whenever you like. Also no counterparty risk because the investments have an FSCS guarantee. That protects the cash 100% and the tracker against fraud but not market performance.