Ok then - How do I choose a S&S ISA!

EdInvestor

Biggles14 wrote: »

Up until this year it has been uneconomical to invest in a share ISA unless you are a higher rate taxpayer.

Why? It is true that basic rate taxpayers do not pay tax on their dividends, unlike HRTs who are up for an extra 25%, but the ISA does shelter capital gains which can mount up over time.Not everyone wants to incur the cost of selling and rebuying shares to use the annual CGT allowance, which is I agree, reasonably high. .

The £3000 per annum that you were allowed to put into a Stocks and Shares ISA is really to small an amount.

Actually it's 4k I believe, quite economic if you use an online broker with low charges. Some of them have fees as low as 1.50 a trade.

The problem with these funds however is that the Fund Manager want a regular cut in the form of fees of the amount invested whether or not you are showing a profit. If the stock market goes down as it has yesterday these management and annual charges can quickly eat away at your capital.

I agree and of course they eat into your returns even when the stockmarket goes up .

I would suggest that you contact a Company like Hargreaves Landsdown and buy shares in cetificated form. You pay a small one off charge, Around 1.5%, they send you a Certificate, which you keep safe until you are ready to sell. If you hold for the long term you will collect dividends and pay no charges whatsoever.

Many investors would say that keeping share certificates is pretty outmoded these days, when online discount brokers (but not H-L) have no an annual fees and low trading charges.

I think I will continue to keep my own Certificates rather than pay someone to collect my dividends and charge me for doing it when I can do it myself for free.

The brokers I mention won't charge you for this.You might like to look at Selftrade: www.selftrade.co.uk, or for a very cheap service, the Halifax Sharebuilder account.

cheerfulcat

Biggles14 wrote: »

Up until this year it has been uneconomical to invest in a share ISA unless you are a higher rate taxpayer.

Nonsense. Selftrade will provide a self-select ISA for £25/year and Alliance Trust will provide it for nothing. Many fund houses also provide free wrappers.

However, the Cash ISA limit being £3000 per annum has been a much better investment for basic rate taxpayers like myself. [...]Since the only benefit of a share ISA is that you protect any capital gain you might make (Which incidently is unlikely to exceed your personal capital gains tax allowance anyway on a £3000 investment unless you are very clever at picking rapid growth stocks) then I would suggest that you contact a Company like Hargreaves Landsdown and buy shares in cetificated form. You pay a small one off charge, Around 1.5%, they send you a Certificate, which you keep safe until you are ready to sell.

If the only investment you ever intend to make is to buy £3000 worth of individual shares then I suggest that this is a very risky idea, not to mention horribly expensive.

Biggles14

jamesd


Saving CGT isn't insignificant when you move your money between investments and are seeing good growth rates over the long term. Invesco Perpetual Income fund grew by about 19% a year over the last five years. Invest 7000 a year at that return and it takes just 5 years to exceed this year's CGT allowance if you were to move the money to another investment. After 15 years even moving 10% of your investments is enough to do that. 7000 a year is a lot but definitely possible at basic rate for some people. Particularly when people are using the ISA for mortgage repayment and retirement investing.



Lucky you to find this fund. I bow to your investment knowledge. Unfortunatly there are so many funds these days that trying to find a winner is very difficult. After many mistakes trying to find the right Unit or Financial Trust, I now stick to Company Shares, many of which are more like Unit Trusts themselves due to the diversity of their businesses.

P.S. I'm still learing to use this site. How did you wrap the text in your response?.

jem16

Biggles14 wrote: »

jamesd



P.S. I'm still learing to use this site. How did you wrap the text in your response?.

Instead of pressing Reply, press the Quote button to the right of the Thanks button. This will wrap all the text in Quote html codes. You can then delete the bits you don't want to include. This is the easiest way.

jamesd

Biggles14, it's one of the most popular funds in the UK. The Trustnet sector focus pages are also interesting, though they are broken as I post this.

caliston

This has been a very interesting thread - thanks for enlightening me. On reading the comments about looking beyond the last 5 years, are there any sites that gives data for fund prices further back than 5 years? Fidelity seem to give a snapshot of 10 years, but only show separate returns for the last 7.

robp

Agreed, it's nice to see other people starting out in S&S ISA investing as I am.

I've just invested my final £1000 for this year in the Fidelity Special Situations Fund. May be risky with the change of manager occuring, but will be interesting to see if there is any change in performance over the next few months.

stphnstevey

Just to note:
H+L have a 'pretend' fund you can setup if your really not sure and just try out the idea of investing without the risk - going from normal saving to investing can be daunting I know, so maybe this would help if you really can't decide

EdInvestor

caliston wrote: »

.. are there any sites that gives data for fund prices further back than 5 years? Fidelity seem to give a snapshot of 10 years, but only show separate returns for the last 7.

https://www.citywire.co.uk/Funds/Home.aspx

Amazing how few are consistently good enough to last 10 years.

caliston

EdInvestor wrote: »

https://www.citywire.co.uk/Funds/Home.aspx

I'm sure I'm being really stupid here, but can you explain how to get 10 year data? So I've registered and am logged in, and I search for 'Fidelity Moneybuilder UK Index' (a fund someone was asking about the other day, seems fairly popular). I get this page. But that only gives 5 year data, as does the PDF link.

There are 10 year total returns shown in the table when you search for, say, 'UK All Companies' but there doesn't seem to be a breakdown or a little chart (I'm probably missing something obvious). Or was that what you meant?