A Journey of Many Pounds Starts With a Single Penny

LadyGnome

Hi Ed
Yes its purely a tax issue that I would go with P2P lending in an ISA. If I stick most of my existing non ISA savings in high interest accounts then anything over about £17K of cash might breach the PSA (£500 for me). Whilst this might sound a lot, because I tend to save up for things and pay them periodically (school fees) or annually (bills, tax etc.) I can have quite large savings balances at times even if the money is allocated for future payments. If I added a growing P2P balance into the mix then at some point I will breach the PSA.

Given the more risky nature of P2P it won't be a large portion of my retirement planning but I will help lift the overall returns compared to my rather pedestrian Cash ISA.

edinburgher

We also tend to have quite a high savings balance, even when 'completely skint'! 10-15 budget lines all stake their claim to our riches, such as they are... Not a fan of S&S ISAs?

LadyGnome

I will have an S&S ISA too. I have an old one that has a few thousand in which I haven't contributed to this year. I will start a new one shortly. I see the three types of ISA as complimentary:-

Cash - Easy access, no timing issues but low return

IF - Slightly harder to access and a bit more risky but a resonably predictable value i.e. no real timing issues as monthly repayments could be moved from the cost to access section into the free access section if needed or whole amount could be sold for a small discount.

S&S - Higher return and capital growth (depending on risk appetite) but timing of access to the funds is an issue i.e. I wouldn't want to use this for an emergency fund as I might need the money just as the market was tanking.

Currently, my biggest pot is the Cash ISA by quite a long way so some rebalancing is needed.

Goldiegirl

Hello ! I haven't commented on your thread yet, but I've been reading along.


I'm interested to read about your investment plans.


I'm currently reading up on S&S ISA's myself. I know I've got too much in cash, so I need to get some money over to other investments. Although my portfolio will probably be a lot different to what you are looking at. I'll probably end up with at least half of my holdings in bonds and gilts, at my advanced age!


I'm currently leaning towards Charles Stanley as my platform provider. But I'm not taking any action at all until after the referendum, it just seems a bit uncertain right now

LadyGnome

Hello GG


I liked the look of CS. If it wasn't for the fact that I already have an account with the Share Centre they would have been my first choice. I think I can afford to take a bit more risk for the next couple of years and then will have to start to move the portfolio to more conservative income producers.


I made the mistake of looking at my pension pot yesterday and winced at the fall so I think you are right to stay out of the market for the next week or two until the result is known and maybe a bit longer depending on the result.

edinburgher

I'm currently reading up on S&S ISA's myself. I know I've got too much in cash, so I need to get some money over to other investments. Although my portfolio will probably be a lot different to what you are looking at. I'll probably end up with at least half of my holdings in bonds and gilts, at my advanced age!

Do you have a DB pension Goldie?

Goldiegirl

edinburgher wrote: »

Do you have a DB pension Goldie?

Yes, I do, and I'm already in receipt of my pension

The stuff I was reading suggested 60% bonds and gilts and 40% equities for a person coming up to retirement or in the early years of retirement.

But I am younger than the average retiree and I have the security of my pension, and I know it will go up with inflation ( or if inflation is low, more than inflation) each year.

My aim is to grow our money for at least 10 years so we can carry on cruising for as long as possible.

So i might be slightly less cautions, maybe 50/50, but my tolerance to risk is quite low

Although having said I don't like risk, I was looking at Ratesetter this afternoon.

LadyGnome

GG
Your approach sounds sensible. Risk needs to be looked at in context. The ideal pension portfolio for someone with nothing else to fall back on is likely to be more conservative than what suits someone like you with another guaranteed income stream. Even Ratesetter might have a place ... If you have £10k split £9k in a cash isa and £1k in RS then that is one thing: if you have £9k in RS and £1k in the cash isa that is quite another.:eek:

edinburgher

I think you're probably being too conservative. I remember when public sector colleagues were retiring in receipt of pretty decent pensions and I was flabbergasted that their IFAs were suggesting very high risk portfolios for their AVCs and ISAs etc. in retrospect, it made perfect sense. You have a guaranteed 'floor', so you can afford to take more risks than someone without it.

LadyGnome

NSD yesterday. Today should only be chipping in for a present in work.

I will start sorting out the S&S Isa this weekend but I won't be rushing into the market until after the vote - not that I am planning to stick large amounts in, it will be a monthly drip feed. (As I am investing arguably a low market suits me).

9 days to the end of the Xbox squeeze
(single figures!!)