Some advice please...

Flixton86

Recently I have takes steps to get organised and serious with my finances and savings.

Thus far I have opened current accounts with Lloyds, Nationwide and TSB and filled them with the max balances to earn the max interest I can. I have also opened a HSBC loyalty ISA and filled that with £300 to take advantage of their offer.

I am now looking for my next step. I have c.£1.5k in another account earning no interest which I am looking to invest. I have recently paid off my student loan so I am c£150 a month better off. This money I also want to invest each month.

Could a s&s ISA be my best option? I know little about these, but from reading I am seeing Charles Stanley as a good place to start? I guess by the nature of these things they are variable, but what sort of % return could I expect on average? (I get I could get less).
Or should I look to open another current account for 3% interest?

colsten

Flixton86 wrote: »

Could a s&s ISA be my best option? I know little about these, but from reading I am seeing Charles Stanley as a good place to start?

S&S ISAs are about investments, not savings (which is what you have in your Lloyds etc current accounts). Charles Stanley is just a facilitator/platform for investments. They may or may not be your best bet but you have to first decide what you want to invest in, how much, and how often you want to trade. You should read up about investments to start with . Lots of suggestions in this thread: https://forums.moneysavingexpert.com/discussion/5043692

Flixton86 wrote: »

I guess by the nature of these things they are variable, but what sort of % return could I expect on average? (I get I could get less).

Investments typically outperform cash savings in the long run

Flixton86 wrote: »

Or should I look to open another current account for 3% interest?

if you need your money in the next 5-7 years, or if you have less than 6-12 months living expenses in cash funds, you should probably stick with cash investments.

You haven't mentioned pensions - what arrangements do you have?

masonic

Assuming the money in the current accounts would cover ~6 months living expenses, and you don't have any short term need for the money you invest, then a S&S ISA may make sense. Charles Stanley is cheap for buying funds for low investment balances, so would probably fit your circumstances well.

The returns you might get will depend on what you invest in and how much risk you are prepared to take. For example, a 100% equities portfolio might return 8-10% on average over the long term, but would be subject to short term falls of up to 70%. Adding lower risk assets would bring down potential short term losses and also the long term returns. So it really depends how much you could stand to lose without losing sleep at night or panic selling. There is a whole spectrum of risk and the returns you might achieve depend on how much risk you are comfortable taking.

Flixton86

colsten wrote: »

S&S ISAs are about investments, not savings (which is what you have in your Lloyds etc current accounts). Charles Stanley is just a facilitator/platform for investments. They may or may not be your best bet but you have to first decide what you want to invest in, how much, and how often you want to trade. You should read up about investments to start with . Lots of suggestions in this thread:


Investments typically outperform cash savings in the long run

if you need your money in the next 5-7 years, or if you have less than 6-12 months living expenses in cash funds, you should probably stick with cash investments.

You haven't mentioned pensions - what arrangements do you have?

Thanks, I'll have a read. I have a work pension, pay in 4% which I think work matches.

Do s&s Isas require a lot of time to maintain etc? I was hoping to just leave it untouched for a period of time, not make trades etc.

Vanguard Life strategy seems like a good option from other bits I have read. I am after low to low-medium risk so which of these would be my best bet?

Flixton86

masonic wrote: »

The returns you might get will depend on what you invest in and how much risk you are prepared to take. For example, a 100% equities portfolio might return 8-10% on average over the long term, but would be subject to short term falls of up to 70%. Adding lower risk assets would bring down potential short term losses and also the long term returns.

Thanks - so how would I do that?

colsten

Flixton86 wrote: »

Thanks, I'll have a read. I have a work pension, pay in 4% which I think work matches.

Do s&s Isas require a lot of time to maintain etc? I was hoping to just leave it untouched for a period of time, not make trades etc.

Vanguard Life strategy seems like a good option from other bits I have read. I am after low to low-medium risk so which of these would be my best bet?

Good news on the pension front. I would check whether 4% is the max employer contribution and if it isn't, would consider maxing it.

S&S ISAs can take a lot or little maintenance, depending on what you invest in. Lifestrategy is by far one of the lowest maintenance options you can get. Read this: http://monevator.com/vanguard-lifestrategy/. If you have 30 years for your investment, you might opt for the 100% one. If you only have 10 years, the 40% one might suit better. You should really dig into the write-ups about investments.

masonic

Flixton86 wrote: »

Thanks - so how would I do that?

If going for something like Vanguard Lifestrategy, which you could leave alone, you just need to pick the right version to match your tolerance to risk. Low-medium would suggest Lifestrategy 40, which would give you returns in the region of 6% over the long term and would be highly unlikely to lose more than 30% in the short term. Does that sound like amount of risk you'd be comfortable taking?

Flixton86

masonic wrote: »

If going for something like Vanguard Lifestrategy, which you could leave alone, you just need to pick the right version to match your tolerance to risk. Low-medium would suggest Lifestrategy 40, which would give you returns in the region of 6% over the long term and would be highly unlikely to lose more than 30% in the short term. Does that sound like amount of risk you'd be comfortable taking?

Do you mean could or should leave alone?

And yes that sounds about right. I think I've got a lot more to learn if I go the S&s route...

masonic

Flixton86 wrote: »

Do you mean could or should leave alone?

If you're buying Lifestrategy, there really isn't any need to tinker, so yes, you would normally just buy it and hold it over the long term.