Drip Feed/Lump in S&S ISA??

SpeedSouth

Hi All,

Just looking for opinions on a couple of scenarios.

We have our Emergency Fund 20K (Sitting in a mix of Santander, TSB etc)

I have a S&S ISA currently under funded this year by £15,000 (Only recently opened)
Missus has a S&S ISA under funded by £10,000 for this year.

Our emergency fund though sitting in cash reserves in currently over funded by about £5k at least I'd suggest. (I'm aiming for 6-9 months of current spends)

To maximise one ISA (We can't maximise both for the year and keep emergency fund), the way I see it is we have 2 options.

Current drip feed to mine is £300 p/m.

I can increase this to around £1500 p/m
Or I can transfer a lump sum now and reduce the drip feed accordingly.

I realise this really is looking at market timings which I'm not interested in doing, but just wondered if anyone has other thoughts. In an ideal world this is 8 year + savings.

Our car touch wood is in decent shape, but my job whilst I was nervous a few months back for various reasons I'm thinking should be relatively safe again (should either sway thinking one way or the other)

AlanP_2

To my mind car replacement should be planned for / financed outside the Emergency Fund - unless it suddenly dies and is therefore an emergency .

Again, to my mind the Emergency Fund should cover loss of income (or more accurately committed expenditure) for whatever period "feels" right to you.

So neither of those factors should sway you particularly I would say.

As to whether you Drip Feed or pay it all in at once I wonder whether for the time scale you are looking at (next 8/9 months of this tax year?) it will make any difference TBH.

Above comment assumes that markets do not fall through the floor just after you invest but normal fluctuations take place.

I would be more concerned about the spread of investments that are within the ISAs and "manage / reduce" risk by geographic spread at least.

enthusiasticsaver

Presumably this money is in current accounts at the moment (part of the £20k?) It is very difficult to time the market so it depends what you are invested in. I invest in the Vanguard LS60 fund which is quite diverse so if you are in something similar I think from a simplistic point of view I would put in a lump sum. If you are not well diversified you may have to think again.


I have done something similar in recent months but have also opened up a separate cash isa to save for a replacement car next year as well as our emergency funds sitting in current accounts.

SpeedSouth

AlanP wrote: »

To my mind car replacement should be planned for / financed outside the Emergency Fund - unless it suddenly dies and is therefore an emergency .

Yeah would be my aim, unless the engine falls out the car tomorrow where it does come under the emergency bracket. I've seen others talk about boilers as well in the same vein

Again, to my mind the Emergency Fund should cover loss of income (or more accurately committed expenditure) for whatever period "feels" right to you.

That's my thinking to. Just the loss of job/sickness

As to whether you Drip Feed or pay it all in at once I wonder whether for the time scale you are looking at (next 8/9 months of this tax year?) it will make any difference TBH.

Above comment assumes that markets do not fall through the floor just after you invest but normal fluctuations take place.


I would be more concerned about the spread of investments that are within the ISAs and "manage / reduce" risk by geographic spread at least.

At present it's sitting in LVS 60, given my lack of a wealth of knowledge and the small amounts being talked about.

You make a good point about 8/9 month investment timeframe over the 8 years + I hope this to be invested for mind you.

SpeedSouth

enthusiasticsaver wrote: »

Presumably this money is in current accounts at the moment (part of the £20k?) It is very difficult to time the market so it depends what you are invested in.

Yep the bulk of it is sitting in current accounts at present. Anything currently in S&S ISA so around £6k I'm not including in the if needed in emergency pot.

This is the start of being able to invest in ISA alongside the pension.

bigfreddiel

Drip feed or lump sum. It doesn't really make any difference over the long term, and by that I mean 5+ years.
What really counts is time you are invested, secondly you must ensure your charges are at a very minimum so drip feeding monthly could push charges up by a factor of twelve.

Cheers fj