Stocks & Shares ISAs

masonic

Stonegiant wrote: »

You said 'Presumably you are continuing to pay into a pension of some type to get additional tax relief.'
Actually I'm not. I did put a one-off sum of cash from my redundancy cash into my pension but as I plan to draw minimum living expenses from my Drawdown account I wont have any excess cash to put into a pension. Or am I missing a trick here? Where do I find the extra cash to get the benefit of government pension tax rules?

Even if you have no income, you may continue to pay up to £2,880 into a pension per tax year and receive tax relief to top it up to £3,600. As Vortigern pointed out, you should be drawing enough to utilise your personal allowance to avoid paying tax on the money in the future.

traceyaj

Hi , Myself and hubby saw a financial advisor this week at a building society. Both of us are over 55 and are looking to invest £50,000.
The building society charge 4.5 % of the total amount invested. Basically we are looking to invest £20 K each in a stocks and shares ISA and the rest in a SIPP. Does the 4.5 % sound excessive.?

Alexland

4.5% sounds way too high to be an initial setup fee. Is it perhaps the total cost of the setup and a few years servicing?

Either way the high street is usually poor value for investments. For example on the S&S ISA you could look at Vanguard who are one of the world's largest asset managers and have no setup charge, 0.15% platform charge and their multi asset globally diversified LifeStrategy fund series is available for various risk exposures at 0.22% fund fee ongoing.

Alex

StevenGude

Can I open and pay into a S&S ISA and S&S LISA in the same year?

Matteo024

I am ready to start investing, I have done my research and know what I am willing to do, I have 10k to invest into my own chosen portfolio of companies, I plan to hold these shares and get dividends off them and reinvest the dividends to compound it, this is a long term investment I am looking to do for 5 maybe 10 years. However whereas a stocks and shares isa seems like the choice, I wont pay tax on the profits I make when I sell these shares In the next 5-10 years anyway as it will most likely be below the £11000 allowance, and its doubtful that I will earn over the £2000 dividend allowance before I am a good few years into it. To avoid the costs of a stocks and shares isa, is there a way I can just keep these shares in a brokerage account, and get the dividends re invested through that account, therefore only having to pay 1 fee for when I buy the shares and 1 fee for when I re invest the dividends. basically I need to know what alternatives there are other than a stocks and shares isa. help would be greatly appreciated

masonic

StevenGude wrote: »

Can I open and pay into a S&S ISA and S&S LISA in the same year?

Yes, the four types of ISA are: cash (including HTB), S&S, IF and Lifetime. You can pay into one of each.

masonic

Matteo024 wrote: »

I am ready to start investing, I have done my research and know what I am willing to do, I have 10k to invest into my own chosen portfolio of companies, I plan to hold these shares and get dividends off them and reinvest the dividends to compound it, this is a long term investment I am looking to do for 5 maybe 10 years.

"5 maybe 10 years" is not long term. Long term is at least 10 years, preferably closer to 20. The types of investment you would choose for the long term would not be suitable if your timeframe was 5 or 7 years.

Investing in your own choices of individual company shares is not recommended for novice investors. It is generally quite expensive when you only have about £10k to invest, because you really should be aiming for about 15-20 well researched companies and you wouldn't normally spread your money equally between them. You might end up buying only £100-250 worth of some of them. Reinvesting dividends of just a few £ is also very expensive unless your chosen investments have a DRIP programme and your chosen platform can accommodate this. Most likely you'd be best off reinvesting dividend income when you rebalance your portfolio, which will again be an expensive exercise at the £10k investment level.

Why not wait until you have at least £50k to invest and several years experience, and opt for funds until then.

However whereas a stocks and shares isa seems like the choice, I wont pay tax on the profits I make when I sell these shares In the next 5-10 years anyway as it will most likely be below the £11000 allowance, and its doubtful that I will earn over the £2000 dividend allowance before I am a good few years into it. To avoid the costs of a stocks and shares isa, is there a way I can just keep these shares in a brokerage account, and get the dividends re invested through that account, therefore only having to pay 1 fee for when I buy the shares and 1 fee for when I re invest the dividends. basically I need to know what alternatives there are other than a stocks and shares isa. help would be greatly appreciated

Why do you suppose it will be more expensive for you to hold shares in an ISA? The cheapest providers, such as iWeb and X-O don't make extra charges for investing in an ISA.

Alexland

StevenGude wrote: »

Can I open and pay into a S&S ISA and S&S LISA in the same year?

Yes subject to the £4k LISA limit and £20k overall ISA limit per tax year starting 6th April. So you could add £4k to a S&S LISA, £16k to a S&S ISA, receive a £1k LISA bonus and end up with £21k more in ISAs. The S&S LISA and ISA don't even need to be with the same platform - there is more choice in the S&S ISA platform market so you can find slightly lower cost options.

Alex

Matteo024

I appreciate your reply, however I was under the impression that investing in 3-4 strong reliable companies long term is normally a successful approach, I understand 10k is a small amount but right now my money is being eaten away, what else might you recommend that’s long term and low level risk for my circumstances, I’m 19 years old, so I have plenty of time, all this money is mine it’s what I’ve worked for, I want to save for the future

ColdIron

Matteo024 wrote: »

I was under the impression that investing in 3-4 strong reliable companies long term is normally a successful approach

In the nicest possble way this is a bonkers approach for the reasons above and many more

Have a read of these two links to get an idea of some better options open to you
https://monevator.com/category/investing/passive-investing-investing/
https://monevator.com/vanguard-lifestrategy/