Stocks & Shares ISAs

Nardge

Dear Forumites,

Since the above post, I've planned on the following: 


S&S ISA

Selling Vanguard Life Strategy (LS) 80 in part and buying LS 100 in lieu in order to achieve a 50/50 split (within Vanguard). Discontinue contributions. Transfer LS 80/100 split from Vanguard to iWEB, freeing myself of Vanguard's Platform Fee.

Being 100K, LS is best left to accumulate as above rather than be sold for purchase of a different global index fund?

Start Vanguard FTSE All-World UCITS ETF (no UK bias, no bonds, greater portability) contributions with Trading 212 in lieu of the above LS contributions with Vanguard.

Once a significant investment sum has again been attained, transfer Vanguard FTSE All-World UCITS ETF from Trading 212 to a low-fee bank-backed platform (different to iWEB). The purpose of this transfer would be to make the investment 'safer', as being an ETF it has no actual FSCS protection. 

Continue active FTSE All-World UCITS ETF contributions with Trading 212.

LISA

Commence HSBC FTSE All-World IF C contributions with AJ Bell. 

SIPP

Commence Vanguard FTSE Global All Cap IF contributions with Vanguard. 

OVERVIEW

Should S&S ISA, LISA, and SIPP be preferably invested in the very same global index fund, or is the above OK?


Thanking you in advance for your replies,

With Kind Regards

masonic

There is no harm in picking different global funds for different accounts if it benefits you in some way. It just makes it a bit harder to understand the overall portfolio. But one thing I would do is take the opportunity to halve the fund fee of the rather expensive LS fund by replacing this with a cheaper global index fund or ETF. In the ETF space, you could probably find a better option than Vanguard's (e.g. FWRG), the HSBC fund you mention is probably the best index fund option. Obviously neither have the home bias of LS 100. Likely you'd benefit from switching your AJ Bell LISA to an ETF at some point to benefit from their cap on platform fees.

ETFs do have FSCS protection against your platform going bust, so it is not correct to say there is no protection at all. But if the ETF goes bust and somehow manages to lose all of the shares they were holding, then that would be treated as an investment loss and not subject to compensation. Same as for individual shares or investment trusts.

Nardge

Dear Masonic, Alexland, and Dunstonh,

Many thanks for your response, for which I am very grateful!
 

Picking different global funds for different accounts doesn't actually benefit me, and might be deemed pointless. 

I thought it prudent to do so however since both LISA and SIPP were going to be invested with Index Funds (safer than ETFs), and would both have their own separate £85K FSCS protection were discrete Index Funds chosen e.g. in the instance of an Index Fund collapsing. Furthermore, the £85K FSCS limit would be breeched later were I invested in two rather than one Index Fund.

With regards to the S&S ISA, Invest Engine and Trading 212 don't permit investment into Index Funds. I'd therefore choose a 'safer' ETF i.e. VWRP, in lieu.

I've £180K which I wish to invest in a global index tracker, albeit for the lowest fees possible. I can certainly sell the Vanguard Life Strategy (£100K) in it's entirety, only it seemed said that converting such a large sum risked a significant financial loss e.g. through being unlucky with timing, time out of the market, and other things - the latter of which I've not quite understood.

The £180K would be forgotten about indefinitely, ideally on the cheapest reputable platform(s).

Monthly contributions would continue to be made into whichever ETF the £180K were invested in. This would be with Trading 212 to avoid platform and trading fees.

So, bearing in mind the above, what/which is the advisable course of action?

S&S 

1)
- Sell Vanguard LS 100K in it's entirety.
- Transfer as cash to Trading 212.
- Reinvest in which of these: 1) GBOOBMJJJF91 (HSBC),  2) VWRP (Vanguard), 3) FWRG (Invesco)?
  Presumably 1) is the 'safest', 2) less safe, 3) the least safe?  
- Transfer the chosen investment in specie to iWEB for forgetting and long-term safe-keeping.     
EDIT: 1) GBOOBMJJJF91 (HSBC) isn't an option, as it isn't an ETF! 

2)
- A further 80K currently in a Cash ISA.
- Transfer as cash to Trading 212.
- Invest in whichever of the above three two options I choose. 
- Transfer the chosen investment in specie to a second institution that is not part of 'Lloyds Banking Group' (inc. iWEB), again for forgetting and long-term safe-keeping, albeit on an equally cheap and reputable platform.
  Which bank or banking group might this be?  

3)
- Continue monthly contributions into whichever of the above two ETFs is chosen with Trading 212 for the foreseeable.

LISA

- AJ Bell permit investment in any of of the above (1-3).
  As it's an Index Fund and not an ETF, 1) is presumably safest? 
- "Likely you'd benefit from switching your AJ Bell LISA to an ETF at some point to benefit from their cap on platform fees." I'm inferring that it's more expensive to hold an Index Fund than it is an ETF with AJ Bell then?

SIPP

- Vanguard only accept their own 1) VAFTGAG (Index Fund) and 2) VWRP (ETF) on their platform. 
   As it's an Index Fund and not an ETF, 1) is presumably safest? 
- Is there a third institution (besides the above two) whom I could transfer VAFTGAG to for forgetting and long-term safe-keeping, for a cheaper price, once a substantial investment sum has been attained?
- Which bank or banking group might this be?  


I look forward to hearing from you, and anyone else!

With Kind Regards

 


 

Alexland

Personally I dislike the complete gamble of market movements while an account cash transfer occurs (sometimes you win, sometimes you lose but on average markets climb up so you are more likely to lose) so always try and hold an asset that is available on both platforms and request an in-specie transfer even if it takes longer. On large amounts of money if markets move even a few percent up while you are in cash it could take you many years to recover the difference in platform fee reductions.
If you have your S&S ISA on iWeb you might as well hold a fund as you get the FSCS protection on the first £85k although they cannot be traded as instantly as an ETF. I'd be comfortable going above £85k with a reputable fund and platform but if you are not then yes I guess you have to find another fund/etf and platform combination for the next tranche of money. However if you go with an ETF it's the same problem that the investment would not be protected.
On the AJB LISA it's probably easier to start with a fund (maybe on the AJB Dodl for 0.15% platform fee) until you get to around £30k around which point (depending on your trade activity) it will be cheaper to switch to an ETF on the main AJ Bell platform to benefit from the £42 pa fee cap.
On the SIPP once the account gets big enough I find the £90 pa fee cap on Fidelity to hold an ETF to be attractive.

masonic

If you don't like investing in ETFs, then iWeb is an ideal platform for investing in funds cheaply. Therefore, it is probably best to consolidate everything into one Vanguard LS fund, then transfer the whole ISA in specie and pay the £10 trading fees to switch to the HSBC fund when that's complete.

Also, why not transfer the cash ISA directly to the chosen second provider? Interactive Investor is one option you could consider that would cost you a flat ~£150 per year to hold an open-ended fund like the HSBC one. Equivalent to 0.19% as a percentage on £80k, but this will reduce as the investment grows.

Then I agree with Alex, Dodl and Fidelity are looking like good options for the LISA and SIPP if you want to keep these accounts separated from the others.

That just leaves Trading212 for your regular ISA contributions and no need to funnel any existing ISAs through it.

Overstep5422

I wonder if anyone can help me clarify some rules around S&S ISAs. I have found some "rules" that state you can only pay into one ISA of each type per year. However it feels like the words "at a time" have been missed off - surely I can't be locked into an ISA provider for the whole year?

In my case I have opened a Freetrade S&S ISA, have paid cash in and bought stocks. I would now like to transfer to Trading 212 and take advantage of the lower costs associated. The phrasing of the rules I have found implies I have to wait till April to be able to add to a new ISA, but I'd expect to be able to transfer my ISA to T212 and continue to contribute to it as my intended only "active" ISA. What happens to my ISA if I don't want to pay the £6 monthly fee from Freetrade?

Can anyone shed any further light on this?

dunstonh

I wonder if anyone can help me clarify some rules around S&S ISAs. I have found some "rules" that state you can only pay into one ISA of each type per year. However it feels like the words "at a time" have been missed off - surely I can't be locked into an ISA provider for the whole year?

Until 5th April 2024, you could only contribute to one ISA type per tax year.  From 6th April 2024, that rule was abolished.

Overstep5422

dunstonh said:

I wonder if anyone can help me clarify some rules around S&S ISAs. I have found some "rules" that state you can only pay into one ISA of each type per year. However it feels like the words "at a time" have been missed off - surely I can't be locked into an ISA provider for the whole year?

Until 5th April 2024, you could only contribute to one ISA type per tax year.  From 6th April 2024, that rule was abolished.

Yes I believe that I could contribute to a cash ISA, S&S ISA, LISA, etc. in one year as long as the total contribution doesn't exceed £20,000.

However I now want to contribute to move my ISA between providers. Would this count as contributing to a second ISA *of the same type* in one year (even if the first is closed)? This is the point I cannot find clarity on.

Alexland

Overstep5422 said:
Yes I believe that I could contribute to a cash ISA, S&S ISA, LISA, etc. in one year as long as the total contribution doesn't exceed £20,000.

However I now want to contribute to move my ISA between providers. Would this count as contributing to a second ISA *of the same type* in one year (even if the first is closed)? This is the point I cannot find clarity on.

You are now allowed to contribution to multiple Cash or S&S ISAs in the same tax year - however the restriction remains that you can only contribute to one LISA per tax year. If you perform an ISA transfer using the proper process it doesn't count as a new contribution.

Overstep5422

Alexland said:

You are now allowed to contribution to multiple Cash or S&S ISAs in the same tax year

Thanks!