If you have, say, £5k in a cash ISA

The_White_Horse

would it make sense to start drip feeding some of it into a S&S ISA each month instead of just leaving it as a lump sum in a cash ISA earning very low interest?

thenudeone

Depends on your risk profile and view of the prospects for equity investments to provide returns.
Depending on when you invested in equities in the last 5 years, you could have lost 40% or gained 80%
http://www.forecast-chart.com/historical-ftse-100.html

If this is your only savings, IMO you'd be better to keep most or all of it relatively secure so that it will definitely be available in emergencies.

Mikeyorks

Impossible to drip feed it if that £5k is current year subscriptions .... as you have to transfer all (or none). Although you could extract it in cash and do it that way? As there's headroom in the overall £10680 allowance.

Longer term you are likely to get a much better rate on wise S&S investments. But cash is more flexible if that's your only back up.

The_White_Horse

the 5k is not my only savings. they are my only "spare" savings. I could just take out (without penalty) £100 a month, and put that into a S&S ISA. I am relatively young 30-40yrs until retirement. Therefore, it is there for the long term.

Mikeyorks

In which case - it makes sense. Albeit I would step up the level of transfer beyond £100.

My Funds have averaged a 13.5% increase over the last 2.5 years. So it put's cash in the shade. As was the intention - as interest rates bottomed. But it is a bit of a volatile ride.

The_White_Horse

what funds did you go with? to be honest, i have looked at graphs of all types and they are all basically the same. were high, crashed 2008/9 and then recovered.

Le_Chuck

The_White_Horse wrote: »

would it make sense to start drip feeding some of it into a S&S ISA each month instead of just leaving it as a lump sum in a cash ISA earning very low interest?

you can get 3.1% on an instant access cash ISA

Le_Chuck

Mikeyorks wrote: »

Impossible to drip feed it if that £5k is current year subscriptions .... as you have to transfer all (or none). Although you could extract it in cash and do it that way? As there's headroom in the overall £10680 allowance.

Longer term you are likely to get a much better rate on wise S&S investments. But cash is more flexible if that's your only back up.

If its with the same bank/building soc., I think you can do this.

Mikeyorks

Le_Chuck wrote: »

If its with the same bank/building soc., I think you can do this.

I don't know any institution that holds cash ISA and S&S ISAs within the same overall account .... which would be required to achieve that.

Mikeyorks

The_White_Horse wrote: »

what funds did you go with?

Mainly 'emerging markets' as the recovery kicked in. Particularly Brazil / Russia / China .... very little UK. Have balanced it significantly more since then. But few of the Funds escaped the last significant downturn last July.