Repay mortgage; invest in ISA; or SIPP?

MotT

cjno1 wrote: »

The other thing to consider is peer-to-peer lending. Companies like Zopa offer expected returns of 5% after all fees and bad debts, which is more than you can get in most savings accounts. Plus your money goes towards helping real people borrow in the economy, rather than sitting in those big nasty banks as reserves!

Thanks for that! I'll look into this (also, to research how safe that option is.)

MotT

kidmugsy wrote: »

Then the only pension contributions I'd make in your shoes are contributions that get an employer's boost - such as your wife gets. Can't you do that too?

Unfortunately not with my current employer (small business). I think the theme that emerges is S&S ISA and that's where I'll hold my allowances first without investing in anything. With the next significant dip - eg, FTSE>6400 which will come - I'm in.

MotT

atush wrote: »

In any case, the whole 15K doesn't have to go the same place.

That's very true.

As you say, at the moment I go with S&S ISA and consider pensions a little later. The other thing here is that at 1.5% management fees (for only administering my funds) I find my current pension provider a little expensive which is also why I wouldn't put more money in there. S&S ISA option is actually very good with my bank - firstdirect.

kidmugsy

MotT wrote: »

I think the theme that emerges is S&S ISA and that's where I'll hold my allowances first without investing in anything. .

Cash ISAs have the nice feature that they'll pay you some non-zero interest, and then when you think equities look good value you can transfer your Cash ISA to an S&S ISA and plunge right in. And, of course, you can change your mind while you're in a Cash ISA and put the money towards your mortgage instead. That's the sort of flexibility that I prize.

Cash sitting in an S&S ISA will be paid something feeble - 0.01% p.a.? - and then just as an insult the HMRC blighters take 20% tax off that. And you can't transfer it into a Cash ISA.

MotT

kidmugsy wrote: »

Cash sitting in an S&S ISA will be paid something feeble - 0.01% p.a.? - and then just as an insult the HMRC blighters take 20% tax off that. And you can't transfer it into a Cash ISA.

That's good to know!!! Thank you!

atush

No point in putting money in an S&S isa then not investing. Keeping money you don't need for years in cash will see your money shrink. I'd overpay the mtg before that.


And your current pension sounds expensive, transfer it to something better/cheaper.

jimjames

MotT wrote: »

Unfortunately not with my current employer (small business). I think the theme that emerges is S&S ISA and that's where I'll hold my allowances first without investing in anything. With the next significant dip - eg, FTSE>6400 which will come - I'm in.

I guess it depends if a dip happens. Market dropped just under 2% today. If it never reaches 6400 does that mean you wouldn't invest at all?

Personally I wouldn't try to time the market. I might add more after a drop but just drip feeding in will tend to even out anyway especially if you are going across different global markets, some of which have dropped a lot already.

If you are in the FTSE then you'll be getting 3% dividends from day 1 which beats most cash ISAs anyway.