How do you split up your isa allowance between cash and s&s

roryp15

Just trying to find out what other people do

For example

The 2014/2015 allowance 11880 how would you have it split?

50/50, 5940 cash and 5940 stocks,

Or

If you could only put in for example 7000 a year.

Would you max your cash allowance and the rest stocks? Or say 4500 in one and 2500 in the other?

How do you split how much you can afford to put into your cash and shares isa?

Yorkie1

Depends on a number of things, including:

- How much emergency savings do you have? Up to 6 months' outgoings is recommended. Don't lock your money away in a fixed rate or equities if you don't have this.

- Assuming the rainy day pot is sorted, how long do you want to tie up your money for? Do you anticipate needing to get at it within 5-10 years (certainly under 5)? If so, then equities are not recommended as their volatility means you are unlikely to have sufficient time to make up any losses before you need the cash.

Someone with a lot of cash might put 100% in equities; someone without a rainy day fund, or saving for a house purchase in 3 years' time, might put 100% in cash.

roryp15

Yorkie1 wrote: »

Depends on a number of things, including:

- How much emergency savings do you have? Up to 6 months' outgoings is recommended. Don't lock your money away in a fixed rate or equities if you don't have this.

- Assuming the rainy day pot is sorted, how long do you want to tie up your money for? Do you anticipate needing to get at it within 5-10 years (certainly under 5)? If so, then equities are not recommended as their volatility means you are unlikely to have sufficient time to make up any losses before you need the cash.

Someone with a lot of cash might put 100% in equities; someone without a rainy day fund, or saving for a house purchase in 3 years' time, might put 100% in cash.

My 3 savings pots will be : cash isa, s&s isa, premium bonds. Premium bonds are just for fun or for example if i want to treat myself and buy a toy, eg speed boat, jet ski something for a bit of fun. So this will be a rainy day fund if you like.

So its just my 2 isas, will be putting money in every month and no plans to withdraw money unless a complete emergency. Was planning on putting £490 per month into cash and £110 s&s . Or is there a better way to do it

planteria

i use my ISA allowance for the long-term, so i use it all for S&S.

roryp15

planteria wrote: »

i use my ISA allowance for the long-term, so i use it all for S&S.

So you dont save any in cash isa, all stocks and shares?

Anyone got any other ways of doing it

planteria

roryp15 wrote: »

So you dont save any in cash isa, all stocks and shares?

that's right. the rates are low, so not very appealing, but i do have some other cash savings and access to credit card debt if required.

planteria

that said, i do have a Skipton Building Society ISA that goes back about 10 years:)

kidmugsy

We'll start with subscribing to a Cash ISA that, happy days!, pays its original good interest rate to new contributions. When it matures in the autumn, then if general cash interest rate are still low we'll probably transfer it to an S&S ISA. The ability to do that means that a Cash ISA has value in the "optionality" of moving to equities or bonds.
If you don't have a Cash ISA where is the money to come from to plunge into equities after the next crash?


It also means that you can use Cash ISAs in the rebalancing that's called for in such strategies as the Harry Browne Permanent Portfolio.

jimjames

roryp15 wrote: »

So you dont save any in cash isa, all stocks and shares?

Anyone got any other ways of doing it

Same here, 100% goes to S&S ISA. I really can't see the point in cash ISAs for anyone saving long term.

Cash is held as offset against mortgage and small amount in Nationwide Flexdirect, both of which offer far higher rates than any ISA.

Just saw your previous post and the suggested split. If you already have enough cash savings then I wouldn't be putting so much more into cash than S&S ISA. Remember that if shares drop then your next monthly payment will buy more. Shares seem to be the only thing where people are worried about the price falling - any other items most people are pleased to get a lower price just like the January sales.

What age are you? And when is the money needed?

roryp15

Was sitting last night trying to figure it out.

Think im going to worry about filling my cash allowance every year first. As im self employed my pay can vary ALOT eg one minth could be 500quid the next 2500.

Atleast if i put in 495 upcoming allowance and fill my cash isa every year it will give me immediate access should i need it ( although i plan not to touch it ). Anything else i have spare that month i can put into premium bonds , once again no risk, or into my s&s for bit of risk,

So one month could be

495 - cash
0 - premium bonds
0 - s&s

The next month could be

495 - cash
100- premium bonds
200 - s&s

At least i will have the cash as a emergency back up and not risking my money but then if ihave spare cash that month can put into s&s

Savings_Dave

I usually put half in each, but this year I have 11 funds in my Stocks & Shares ISA (long term holdings with many different sector exposures) so I contribute the minimum each month into each - therefore:

STOCKS & SHARES ISA

Regular monthly savings

(11 x £50) x 12 = £6600

CASH ISA

Lump sum

£11880 - £6600 = £5280

This year's best cash ISA hunting is going to be interesting I already have a two-year fixed which matures in February and another one in May