A Reasonable Balance or Time for an IFA.

Because_I_Can

In a quandary on whether or not it would be worth seeking some expert advice or if where I've ended up isn't too bad:-

Age : 47 and 42
Both employed (30 and 18 years same company)
Final Salary Pension: Company pays in 15%, we both pay in extra 5% to ensure we can retire at 60.
Both pay AVCs of £500 per month
Offset Mortgage: 35k outstanding (house worth 300k+)
Savings ISA: £143k cash in fixed rate ISAS
Savings Cash: £86k, half in fixed rates
Shares: £52k (trade now and again - mostly Aviva, BAE, Lloyds, etc)
SAYE Options: Save about £220 a month - currently with £47k at current company share price

Would love to retire early at 55, but happy to stay until 60 max.
Cautious I guess in terms of attitude to risk, but it feels like I'm not maximising opportunities and are too cash safe.

Interested in general critique on above and whether an IFA is going to suggest radical change.

Aegis

Because_I_Can wrote: »

In a quandary on whether or not it would be worth seeking some expert advice or if where I've ended up isn't too bad:-

Age : 47 and 42
Both employed (30 and 18 years same company)
Final Salary Pension: Company pays in 15%, we both pay in extra 5% to ensure we can retire at 60.
Both pay AVCs of £500 per month
Offset Mortgage: 35k outstanding (house worth 300k+)
Savings ISA: £143k cash in fixed rate ISAS
Savings Cash: £86k, half in fixed rates
Shares: £52k (trade now and again - mostly Aviva, BAE, Lloyds, etc)
SAYE Options: Save about £220 a month - currently with £47k at current company share price

Would love to retire early at 55, but happy to stay until 60 max.
Cautious I guess in terms of attitude to risk, but it feels like I'm not maximising opportunities and are too cash safe.

Interested in general critique on above and whether an IFA is going to suggest radical change.

Given your time to retirement, the major factor standing out is the very large cash balance which might work better over the medium term in investments. This would be a blend of asset classes, sectors and geographies dependant on your risk profile (cautious for one person can be quite different to the same description for another) and whether you will actually need the portfolio for retirement (sounds like you expect to), so it would probably not be a case of investing into pure direct equities as your current investment portfolio suggests.

I doubt anything major would change regarding your pensions, but a good IFA would look at the scheme and the AVCs to ensure that you are maximising your personal entitlements.

atush

I agree you are holding too much cash and should put some of those ISAs into S&S isas.

But these dont have to be risky single shares like you trade now, i'd be looking at some buy and hold funds, trackers and investment trusts for your 230K cash pile (265K with the offset included).

racing_blue

atush wrote: »

I agree you are holding too much cash and should put some of those ISAs into S&S isas.

Unless thinks the markets are going to tank, using cash as a place-marker until can resume investing once more?

Because_I_Can

Thanks for the comments so far. Agree it is probably wise to seek out a good IFA and move some of that cash into some type of fund(s) or tracker(s). Sensible to seek out the views of a couple of IFAs for comparison (advice and fees) or/and try and seek out one that has been recommended I guess?

Because_I_Can

Apologies for asking as I'm sure I could probably find via searching, but a few people have recommended various reading material for novice investors re what funds, investment trusts, trackers, etc, mean in reasonably plain english. Any recommendations?

masonic

If you are going to seek out an IFA, it would be a good idea to approach more than one. There will, no doubt, be variations in the cost and level of service you are offered. You should think about exactly what you want, whether it's some ad-hoc help constructing a plan, or ongoing management.

Recommended Reading thread:
https://forums.moneysavingexpert.com/discussion/4752194

nrsql

I would be a bit concerned about both working at the same company and 47k of savings there. I've worked (freelance) at 4 companies in the last two decades which have all gone nearly bust, two of them very large and respected (no connection I hope) all losing staff a lot of expected savings as well as their jobs.

A lot of your income looks like it will be with pensions and I always think it's a good idea to get an IFA involved and check here as things change frequently and are complicated.

Yes you have a lot in cash but it depends on what you feel comfortable with. I would dump some in a leave-it fund like vanguard but it's up to you.

It looks like you are probably on track so don't really need to take risks - but investing a bit more wouldn't be too risky and might be fun. Maybe start transferring some slowly or a proportion of new savings (that sort of thing might be expensive through an IFA if it's ad hoc).

gadgetmind

Because_I_Can wrote: »

a few people have recommended various reading material for novice investors

Novice investors don't typically hold individual shares as you do, but with £50k+, you can diversify across 15-20 companies and spread risk. However, you're more than likely not as globally diversified as would be desirable. Many claim the FTSE 100 is very global, but compare it to the S&P 500 over the last couple of years to see why I feel you need fingers in more pies.

Also note that holding "unwrapped" like this risks tax inefficiency in the case of corporate action, and perhaps even tax on dividends if you stray into HR tax, which given everything else you've said seems likely.

You really need to start getting these into S&S ISAs and ditto for some of the cash, as others have said.

Tim Hale's "Smarter Investing" is a good starting point if you've got a few hours to read it. It steers you towards low fee trackers, but you can use the principles of asset allocation using "collectives" such as funds and ITs if you choose.

Even if you do use an IFA, you've at least got a grasp of the basics first, which is key.

gadgetmind

Because_I_Can wrote: »

SAYE Options: Save about £220 a month - currently with £47k at current company share price

Sounds like these might be close to vesting? Make sure you understand CGT allowances and also tricks like moving SAYE shares directly to an ISA and spreading selling over tax years.