Vanguard fund in S&S ISA or Cash ISA for non-taxpayer

[Deleted User]

Hi, I currently have 2 Cash ISAs earning 1.3% with different providers.

Having read up on the Vanguard Lifestrategy funds I am considering moving them both to a S&S ISA with iShares and putting all of the money in the 80% equity fund as I am 23 years old.

Being a non-taxpayer (for the moment) I was wondering if it was worth moving to the S&S ISA or whether it would be better to keep in Cash ISAs despite the low interest rates available? I am happy for the money to be locked away for 10 years if necessary.

I was tempted by the 20% equities version as may need access to the money sooner but read that bonds are at an all time high which put me off.

I would appreciate any thoughts on the above! Thanks

Your_Hero

Whether you are a tax-payer or not is a red herring for an ISA to ISA switch. It's a like for like replacement in terms of taxation.

The main issues you should consider is the term of your investment horizon and the risk of the chosen fund, as well as your capacity for investment loss. Over a 10 year term, an SS ISA should make more sense.

jimjames

Cash ISA is pointless for a non taxpayer at the moment when you can get such hugely better rates outside. Only reason to stick with it is if you have lots more than £15k.

Really depends what you plan on doing with the money, if it's for a house deposit in the near future then S&S isn't the ideal place.

[Deleted User]

jimjames wrote: »

Cash ISA is pointless for a non taxpayer at the moment when you can get such hugely better rates outside. Only reason to stick with it is if you have lots more than £15k.

Really depends what you plan on doing with the money, if it's for a house deposit in the near future then S&S isn't the ideal place.

I do have a fair amount more than £15k and already have Santander 123 etc. hence why I still have it!

A house deposit in the next 5 years is possible - would you say the Lifestrategy with 20% equities be a better bet in that case?

[Deleted User]

any other thoughts? thanks

jimjames

Olivier811 wrote: »

I do have a fair amount more than £15k and already have Santander 123 etc. hence why I still have it!

A house deposit in the next 5 years is possible - would you say the Lifestrategy with 20% equities be a better bet in that case?

If you are looking at needing the money within or at 5 years then you are taking a risk using shares. As long as you're aware of that then the LS80 is a good option.