Stocks & Shares ISAs

pomme_2

Hello all

I'm currently looking to open an S&S ISA and require some advice/help.

I am thinking of investing a small amount per month, say £25. I have looked at the MSE S&S ISA page (and some of this thread) and with my lack of knowledge, I would prefer to go down the 'Do-it-for-me platforms'. 

Therefore, I would like to ask the following questions:

• It is beneficial to put a lump sum per year or is it OK to invest this small amount monthly?
• Should I be concerned about the fees attached to the account or look at the reputation of the Fund Management Company?
• When identifying the best Fund Management Company, what should I be looking for?
• Is there anything else I should consider?

From my first look, I've been thinking of looking into the following companies:

• Cavendish Online
• Openmoney
• Vanguard LifeStrategy (but not sure of which one!)

A little background:

• 51 years old
• No mortgage
• Have savings for rainy day and emergencies

Any help would be great. Thank you

dunstonh

The annualised returns of the FTSE 100 over the past 20-25 years are pretty respectable and on par with other FTSE indices

The FTSE100 has been one of the worst performers for the last 25 years.   So, not respectable.    And its not comparable

and the FTSE 100 is certainly not overvalued (lower P/E ratio than other indices). 

Depends on what you are comparing them against and what currency you use to value them in.   The FTSE100 is heavy in old industry that is in decline.    And too may of the companies do not reinvest for future growth but return money as dividends that creates a long term drag.

Timlagor

I'm pretty shocked to find a guide to S&S ISAs that only mentions one that actually lets you buy shares and that as an afterthought

masonic

Timlagor said:

I'm pretty shocked to find a guide to S&S ISAs that only mentions one that actually lets you buy shares and that as an afterthought

Which guide have you found that only mentions one S&S ISA that lets you buy shares?

ARH_2

pomme_2 said:

Hello all

I'm currently looking to open an S&S ISA and require some advice/help.

I am thinking of investing a small amount per month, say £25. I have looked at the MSE S&S ISA page (and some of this thread) and with my lack of knowledge, I would prefer to go down the 'Do-it-for-me platforms'. 

Therefore, I would like to ask the following questions:

• It is beneficial to put a lump sum per year or is it OK to invest this small amount monthly?
• Should I be concerned about the fees attached to the account or look at the reputation of the Fund Management Company?
• When identifying the best Fund Management Company, what should I be looking for?
• Is there anything else I should consider?

From my first look, I've been thinking of looking into the following companies:

• Cavendish Online
• Openmoney
• Vanguard LifeStrategy (but not sure of which one!)

A little background:

• 51 years old
• No mortgage
• Have savings for rainy day and emergencies

Any help would be great. Thank you

A small amount every month is a great move. Not only does it help you into the habit of saving,  it spreads out the risk of investing on a 'bad' or 'good' day. You can read more on pound cost averaging too.   

Vanguard life strategy is a good idea for a first time investor. It's quite simple and the fees are low, meaning you get more of the returns. I suggest that you start there and as you get the feel of how it works, investigate the investment trusts that are out there. Which vanguard life strategy fund depends on how long you're investing for. If you have a rainy day fund and are locking money away for retirement, at least 60% equities, perhaps 80 or even 100 depending on your risk appetite. When it comes to these low cost passive funds, fees are really king.

At 51, a pension might be more appropriate for you, particularly if you're a higher rate tax payer. Have you considered this? It might be as
simple as making additional contributions to a workplace pension, or you might set up a SIPP. You'd be able to save before tax, get 25% of it out tax free soon, and maybe pay less tax on the rest. 

Bragi

Does anyone know why Freetrade is not on MSE's main S&S ISA page? They only have a £3/m fee.

pomme_2

ARH_2 said:
A small amount every month is a great move. Not only does it help you into the habit of saving,  it spreads out the risk of investing on a 'bad' or 'good' day. You can read more on pound cost averaging too.   

Vanguard life strategy is a good idea for a first time investor. It's quite simple and the fees are low, meaning you get more of the returns. I suggest that you start there and as you get the feel of how it works, investigate the investment trusts that are out there. Which vanguard life strategy fund depends on how long you're investing for. If you have a rainy day fund and are locking money away for retirement, at least 60% equities, perhaps 80 or even 100 depending on your risk appetite. When it comes to these low cost passive funds, fees are really king.

At 51, a pension might be more appropriate for you, particularly if you're a higher rate tax payer. Have you considered this? It might be as
simple as making additional contributions to a workplace pension, or you might set up a SIPP. You'd be able to save before tax, get 25% of it out tax free soon, and maybe pay less tax on the rest. 

Thank you ARH_2 for your response. The suggestion about contributing to my pension is a very interesting angle, that I wouldn't have considered at all - as I don't understand the benefits of tax relief.

I am now considering opening an S&S ISA with £25 per month as well as topping up my pension... Just need to work out the amount for my pension (I've recently been enrolled into a workplace pension).

I will continue with my research and will make some decisions soon. Cheers!

dunstonh

Basically, if you are willing to leave the money invested until your retirement age range then pension beats ISA as long as you are not going to be a higher rate taxpayer in retirement.

dbrookf

I have a H&L Stocks & shares ISA - I am thinking of transferring it all to a lower cost investment platform. How would I do this and does it cost anything? (I’m a novice!) thanks.

carrollp

dbrookf said:

I have a H&L Stocks & shares ISA - I am thinking of transferring it all to a lower cost investment platform. How would I do this and does it cost anything? (I’m a novice!) thanks.

You would setup an account with the new investment platform and, assuming they allow transfers, follow the instructions on their site. Normally you just enter the details of your existing ISA online or fill out and post a form and they take care of the rest. It should not cost anything and sometimes platforms will give you a bonus to transfer to them.
Note that you will be out of the market for a few weeks while the transfer takes place so you could lose out on gains but also benefit if the market falls. Its probably a good time to do this in my opinion.
If the new platform supports the same funds then your holdings will be transferred over intact but if not then they will sell them and the cash would be transferred to allow you to reinvest in supported funds. In any case your ISA protection is not affected.
You can check out https://comparetheplatform.com/ or http://www.comparefundplatforms.com/ to see what works best for you depending on the size of the portfolio and the amount of trades you do.
Good Luck.