Lloyds Shares As An ISA

Robster312

I am interested in getting LLOYDS bank shares but as an ISA. What is the best way to go about this, and the most cost effective (I.e. Direct with Lloyds or through a broker)?

bowlhead99

Not direct with the company. Most companies don't run their own brokerage and ISA facilities - if you want to buy shares in them you need to use a stockbroker or investment platform who will buy shares for you off someone else on the stockmarket who wants to sell.

As it happens, because Lloyds are a financial services business, they do have an investment platform(https://www.lloydsbank.com/share-dealing/share-dealing-isa.asp), but it isn't the cheapest around and it isn't integrated with your online banking as a Lloyds customer so there are no particular reasons to use it over their cheaper rivals.

The cheapest S&S ISA for you if you are just going to use it to buy and hold some Lloyds shares is probably from http://www.x-o.co.uk/ who are an execution-only (no advice) stockbroker and charge £5.95 per purchase or sale. Alternatively http://www.iweb-sharedealing.co.uk/charges-and-interest-rates/stocks-and-shares-isa-charges.asp would be lower at £5.00 per trade but you have to pay a £25 account opening fee so depending on whether you are investing £500 or £20,000 that could be a relatively expensive fee as a percentage of the money you're investing.

As it happens, IWeb is a budget brand of Halifax which is part of Lloyds Banking Group but using their services to buy some Lloyds shares is not something I would describe as 'buying direct with Lloyds'.

If you are asking here it is likely you don't know much about buying stocks and shares so the standard advice of course would be not to invest your money in individual companies, but to buy an investment fund where your money is added together with other people's to buy you a share in a whole portfolio of 50-5000 companies' shares, across lots of industries worldwide. Unless you have a reason to believe that Lloyds position within the UK banking industry makes it the very best thing to own out of all the companies in all the industries across the planet? If it is, you'd expect that to be already reflected in the £48 billion plus price that it would cost you to buy all the shares...

Pincher

Some good news for Lloyds shares today.

http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1493273900547908900.html

The timing is a bit suspicious for your enquiry, though.

Overheard something in a Pub?

I have LLOY in a Stocks and Share ISA, so just tell them it's great minds think alike.

Slightly late for this year, as the big dividend went ex-dividend on 6th April 2017. If you are aiming for the long term, the usual drill is to open a dealing account, for which you pay a quarterly fee of around £10. They will then let you open a S&S ISA, for "free".

Let us say you buy 10,000 shares of LLOY (Lloyds ticker code) for

£6,995.25 = 69.50p x 10,000 + £34.75 (0.5% stamp duty) + £10.50 (dealing charge)

It is slightly annoying, as you need to put enough in there to cover the final settlement, so if you only put £7,000 in, and the share price zooms past 70p, before you place the order, you have to pay more in.

So, you now have 10,000 shares of LLOY sitting in an ISA, which is currently paying 3.05p dividend per share, £305 a year. You are paying ~£40 a year in fees for having the dealing account. So, you are up £265 a year.

If things go accordingly to plan, they make more money, and pay out higher dividends over the years, so the share price goes up.

The dream is, in ten years, the share price is £4 (£40,000), and the dividend is 30p (£3,000 a year). And it's all TAX FREE. which is the best bit.

Don't forget, you can choose to take the dividend as shares, instead of cash. It's called scrip dividend.

Fatbritabroad

Pincher wrote: »

Some good news for Lloyds shares today.

http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1493273900547908900.html

The timing is a bit suspicious for your enquiry, though.

Overheard something in a Pub?

I have LLOY in a Stocks and Share ISA, so just tell them it's great minds think alike.

Slightly late for this year, as the big dividend went ex-dividend on 6th April 2017. If you are aiming for the long term, the usual drill is to open a dealing account, for which you pay a quarterly fee of around £10. They will then let you open a S&S ISA, for "free".

Let us say you buy 10,000 shares of LLOY (Lloyds ticker code) for

£6,995.25 = 69.50p x 10,000 + £34.75 (0.5% stamp duty) + £10.50 (dealing charge)

It is slightly annoying, as you need to put enough in there to cover the final settlement, so if you only put £7,000 in, and the share price zooms past 70p, before you place the order, you have to pay more in.

So, you now have 10,000 shares of LLOY sitting in an ISA, which is currently paying 3.05p dividend per share, £305 a year. You are paying ~£40 a year in fees for having the dealing account. So, you are up £265 a year.

If things go accordingly to plan, they make more money, and pay out higher dividends over the years, so the share price goes up.

The dream is, in ten years, the share price is £4 (£40,000), and the dividend is 30p (£3,000 a year). And it's all TAX FREE. which is the best bit.

Don't forget, you can choose to take the dividend as shares, instead of cash. It's called scrip dividend.

Think it depends on the platform as I asked this of charles stanley direct and they didn't offer a dividend reinvestment option mores the pity

jimjames

Robster312 wrote: »

I am interested in getting LLOYDS bank shares but as an ISA. What is the best way to go about this, and the most cost effective (I.e. Direct with Lloyds or through a broker)?

Just to clarify in case what you wrote wasn't a typo.

You can't get Lloyds (or any other shares for that matter) AS an ISA. An ISA is just a wrapper so you can use that wrapper to buy shares inside - so you can purchase Lloyds shares IN an ISA. You can also buy other shares and funds inside that ISA which would probably be advisable if you don't already have a balanced portfolio