Isas- Conundrum / Guidance

furiousfencer

Hi,

I've accumulated £14k over the years into a Capital Guaranteed Bond which is performing rubbishly. I'm going to transfer it.

I've started up my own Stocks and Shares Portfolio and a new Cash Isa. I've already put my allowance into the cash Isa for this year. it accepts transfers in.

So i'm going to transfer the proceeds of the £14k into the Cash Isa and Stocks and Shares Isa.

With the stocks and shares Isa I will be starting from scratch and plan to contribute to the full amount throughout the year.

I am unsure of how much to transfer into each. The investment would be long term 5+ Years, so I'm really sure.

I do want to build up a good amount in the S+S isa's to try and get a good growth rate. I will mostly be investing in funds.

Any ideas on how I should split to build up a decent portfolio for future growth?

Mikeyorks

furiousfencer wrote: »

So i'm going to transfer the proceeds of the £14k into the Cash Isa and Stocks and Shares Isa.

Is the structured fund ('Capital Bond') already in an ISA? If so that may constrain how you transfer it.

If it's in an existing S&S ISA ....... then you can only transfer it into a similar ISA.

furiousfencer

Hi,

The existing Bond is in a Isa and can be transferred without penalties, at any time. Just the bond is valued and units sold before cancellation. I'm ok with valuations going up and down slightly.

Mikeyorks

If it's in an existing Stock & Share ISA - then you can only transfer (the resultant cash) to the same type.

If (less likely - as most structured products tend to come under CGT and not Income Tax) it's in a Cash ISA .......... you can transfer it to either type of ISA (provided the existing provider would let you split it). There would be no problem transferring the entity to a Cash ISA or a S&S ISA.

furiousfencer

Hi,

It's classified as a cash Isa (The 14k Bond) as opposed to a S+S isa.

I'm just not sure how much to divide into the new cash isa and new S+S isa to have a balanced portfolio.

Mikeyorks

furiousfencer wrote: »

It's classified as a cash Isa (The 14k Bond) ...........I'm just not sure how much to divide into the new cash isa and new S+S isa to have a balanced portfolio.

I'm suprised it's 'cash' ........ however, makes it easier to transfer (hopefully). You need to check with the provider that they will let you split it? If not you could transfer it all to your new cash ISA and then transfer a chunk from there?

As regards how much into each? Personal decision and much depends on what other savings you have. You must keep a cash element as a fall back ....... but I would transfer the majority to the S&S.

My cash ISAs are running at 3.7% and the S&S at close to 14% (mainly in Funds) ........ so I clearly favour the latter.

furiousfencer

Mikeyorks wrote: »

I'm suprised it's 'cash' ........ however, makes it easier to transfer (hopefully). You need to check with the provider that they will let you split it? If not you could transfer it all to your new cash ISA and then transfer a chunk from there?

As regards how much into each? Personal decision and much depends on what other savings you have. You must keep a cash element as a fall back ....... but I would transfer the majority to the S&S.

My cash ISAs are running at 3.7% and the S&S at close to 14% (mainly in Funds) ........ so I clearly favour the latter.

Thanks for your help
Hi, I called the provider and they said it's ok to split.

I guess on split i'll do a 70 / 30 % with bulk into S+S. For fund ideas for the S+S i guess it may be worth going with a prebuilt portfolio?

Anything i save is going towards a flat further down the line, so good growth is a must.

Mikeyorks

furiousfencer wrote: »

it may be worth going with a prebuilt portfolio?
.

70:30 sounds sensible.

Some people do go for 'Funds of Funds' as they're easier. And I assume that's the sort of pre-package you're looking at? But they rarely offer the sort of return you're looking for.

The Vanguard Lifestrategy funds appear to offer a self balancing alternative. This is worth a read - follow all the links outward :

http://monevator.com/vanguard-lifestrategy/

mgdavid

OP said in first post:
'I've already put my allowance into the cash Isa for this year.'

so you will have to wait until april 2013 to re-invest your bond proceeds.

Mikeyorks

mgdavid wrote: »

OP said in first post:
'I've already put my allowance into the cash Isa for this year.'

so you will have to wait until april 2013 to re-invest your bond proceeds.

Totally wrong.

The OP is transferring the proceeds within the ISA wrapper........ as mentioned countless times.

pqrdef

furiousfencer wrote: »

so good growth is a must.

We'd all like to say that.