Stocks & Shares ISAs

newnhak

:eek: bad use of terminology on my part.


Yes i meant 'where' as in the fund type not the platform. Although on your point regarding ETF vs non-ETF my initial research seems to imply that some companies have similar versions of the 2 so then it would be a case of which one has the best charges structure to suit how you wish to invest

bluepowell

Hi.

I have a read the thread and guide with great interest and have a couple of questions?

The general consensus seems to be that if you invest in a S&S ISA you need to be in it for the long term to take into account the peaks and troughs of market moving. My question is, am I better sticking with a fund or chopping and changing over that long term time period?

The reason I ask is that my father has recently passed away and I have inherited a couple of investments. 2k in one and 20k in another. Both are just sat there not really doing anything. Looking them up on the internet reveals that they both are rated as “below average”.

The Vanguard LifeStrategy 60 accumulation fund seems to be well regarded on here. Would putting the 22k in here for the next 5 to 10 years seem like a good long term plan?

I also plan to start regular deposits, so would adding to this fund, or picking something else be a better plan (seems diversification is the key) Or would I be better putting these monthly deposits in a SIPP as realistically the money I would be putting away would be for when I retire in 28 years time.

Thanks in advance.

dunstonh

The general consensus seems to be that if you invest in a S&S ISA you need to be in it for the long term to take into account the peaks and troughs of market moving. My question is, am I better sticking with a fund or chopping and changing over that long term time period?

An economic cycle is typically around 10 years. So, if you invest for less than that period, you dont know if you are going to get the good years, bad years or nothing years.

As for changes, it depends on how you invest. A risk targetted multi-asset fund with underlying passives would rarely need changing. However, a bespoke portfolio of single sector funds would need changing annually (rebalancing, risk adjustments, weightings reflecting economic cycle and actuarial data etc).

The reason I ask is that my father has recently passed away and I have inherited a couple of investments. 2k in one and 20k in another. Both are just sat there not really doing anything. Looking them up on the internet reveals that they both are rated as “below average”.

Below average in what respect? You need to be wary of basic ratings. Especially if they are just comparing funds in the same sector. A sector may have funds covering risks 3 to 8 on a 1-10 scale. You would expect the higher risk funds to perform better in growth periods and worse in negative periods. So, a low-risk fund in that sector may be below average but that is bey design. It doesn't make it unsuitable. The investor may not want the higher levels of volatility that goes with the higher risk fund that has done better looking backwards. Indeed, where we are at the moment, buying funds that have done the best over the last 5 years may see them being the worst in the years ahead.

The Vanguard LifeStrategy 60 accumulation fund seems to be well regarded on here. Would putting the 22k in here for the next 5 to 10 years seem like a good long term plan?

It is a viable option but HSBC is better value. This is one of those examples where a change occurs. 5 years ago, VLS was the lowest cost option. That is no longer the case. Plus, their asset allocation is not to everyone's liking. You won't be unhappy with it but it is no longer what can be considered top of the pile.

Or would I be better putting these monthly deposits in a SIPP as realistically the money I would be putting away would be for when I retire in 28 years time.

If the pension meets the objective better then use that. If ISA is better then use that. Investments are the same in both as are the charges (in most cases). So, its really only the maturity process and accessibility along with tax that differs.

newnhak

I have maxed out my ISA this year but still have some cash to invest. If I purchase now through a nominee account is it reasonable to assume all platforms would let me transfer investments into an ISA account on the same platform with no fee?

eskbanker

newnhak wrote: »

I have maxed out my ISA this year but still have some cash to invest. If I purchase now through a nominee account is it reasonable to assume all platforms would let me transfer investments into an ISA account on the same platform with no fee?

No, IMHO - you can't transfer investments into an ISA from outside one without going via cash*, and so have to sell and repurchase (aka Bed & ISA), which will typically incur the relevant transaction charges. These may be zero depending on your chosen platform's prevailing charging structure, but the principle is that you'd need to pay the going rate, whatever that is, unless they're open to negotiation.


* There are some exceptions such as maturing sharesave schemes or transferring 'in specie' between ISAs.

newnhak

Thankyou. I was guessing i didnt have all the information. I might then hang on to the cash until April

dunstonh

newnhak wrote: »

I have maxed out my ISA this year but still have some cash to invest. If I purchase now through a nominee account is it reasonable to assume all platforms would let me transfer investments into an ISA account on the same platform with no fee?

It depends on the assets. A sale to cash, transfer to ISA as cash and then repurchase will generate dealing charges on assets that are subject to those (or where there are spreads). However, on single priced assets with no dealing costs, then it is cost neutral.

Nellie43

I have an ISA that's matured and has automatically been reinvested at 1.75% - I have another week left to change this as part of the cooling off period. Fixed saving accounts seem to have a better rate of interest but I'm scared to withdraw the funds as I keep seeing notes saying don't do this ! The rates on the S&S Isa's are enticing but as a single parent I can't risk losing this money. I'm on a low income so tax isn't really a problem for me at this time. The Isa's with the best rates wouldn't do a transfer (i've tried) - they will only take money from a bank account which means cashing in my ISA. I'm not great with money so locking it away for a few years is a good idea - please help as I don't know what's best to do.

Alexland

Nellie43 wrote: »

I have an ISA that's matured and has automatically been reinvested at 1.75% - I have another week left to change this as part of the cooling off period. Fixed saving accounts seem to have a better rate of interest but I'm scared to withdraw the funds as I keep seeing notes saying don't do this ! The rates on the S&S Isa's are enticing but as a single parent I can't risk losing this money. I'm on a low income so tax isn't really a problem for me at this time. The Isa's with the best rates wouldn't do a transfer (i've tried) - they will only take money from a bank account which means cashing in my ISA. I'm not great with money so locking it away for a few years is a good idea - please help as I don't know what's best to do.

How much money are we talking about and which interest rates / terms are you comparing?

We cannot make the decision for you but yes non-ISA savings accounts are generally paying better rates than Cash ISAs to the point where even if you did pay the tax depending on your circumstances and products then you could still be better off.

However by removing money from the ISA wrapper (which would be deposit into a non-ISA account) you lose the tax-free wrapper and so it would use your annual £20k ISA contribution allowance if you decided in future to re-wrap the money.

Alex

Nellie43

Thanks Alex - it's £15000 - I will remove it and put it in a fixed savings account although slightly tempted by the S&S Isa but I daren't risk it ...