investment isa

Chimasuki

hi, i have £5k to invest in a stocks and shares investment isa, i have read Martins recommendations for platforms and their charges, i do not wish to trade and just want to put the money away in a managed fund for a few years and let it grow, which platform would you recommend ?

bostonerimus

I wouldn't recommend any active management......for small sums that you want to leave alone for say more than 5 years in an ISA I'd go with Vanguard and use a VLSxxx fund. If you are young something like VLS100 or VLS80 might work. There are plenty of other solutions, but this one is inexpensive and simple.

[Deleted User]

Hi,

I posted this link in another thread this morning, will give you an idea, though check out individual sites for charges, and exit fees, in case you want out early.

Audaxer

chimasuki wrote: »

hi, i have £5k to invest in a stocks and shares investment isa, i have read Martins recommendations for platforms and their charges, i do not wish to trade and just want to put the money away in a managed fund for a few years and let it grow, which platform would you recommend ?

A few years is too short a time frame to guarantee that an investment will grow as there could be an equity crash any time. You need to be prepared to leave it invested a lot longer and decide what level of risk you want, and then a good idea is to choose a passive global diversified multi asset fund that has the percentage of equities to bonds that you are comfortable with as regards risk/volatility.

Money_Help

Vanguard now have their own platform which offers an ISA. Very low cost and offers excellent low cost managed strategies depending on your appetite for risk.

gien

This is just the info I was looking for. i have 6k to transfer out of a regular saver and was thinking of using an investment ISA because interest rates are so low. Each year I will save the same amount. I intend to use the money to pay for my daughter's uni fees in about 8-10 years time. Is that a long enough investment do you think?

ewaste

Well since you've been around on the forums for a while you'll doubtless be aware of the overall opinion on 'paying uni fees' although I'm sure you probably meant the broader objective of providing financial support.

In my personal opinion I'd say 8-10 years is generally a suitable investment time frame depending on what those investments are, I probably wouldn't go too risky though. I think it's also wise to acknowledge the likelihood of needing to de-risk as the actual date of requiring access to the funds approaches.

gien

Thanks for the reply. I think I'll put this years savings away in some form of investment vehicle then. I know that the general opinion is that many students will 'never end up paying back their tuition fees before they are written off so don't pay them up front'. That said, you never know how the conditions attached to student loans will change over then next 8-10 years so I want to be in a situation to be able to pay outright in necessary. I have children in Uni now and we have been caught by the massive rise in fees and are also ineligible for maintenance loans so money is tighter right now. I also expect my children to be in the group that will have to pay them back since it's likely that they will be higher earners.

bowlhead99

gien wrote: »

I think I'll put this years savings away in some form of investment vehicle then.

The most obvious choices if the money will ultimately be spent on uni fees (or on avoiding uni borrowing) are is junior ISA in the child's name or S&S ISA in your own name. The difference being the former gives the child access to it when they're 18 (and it can't be cashed out earlier) while the latter can be accessed whenever you want and is yours to do whatever you like with.

If the amount is only £6k a year it would easily fit inside your own £20k a year allowance and give you the most flexibility - the total amount you would be saving at £6k a year for a decade plus investment growth is likely to be more than they would need for uni fees. The annual limit on the junior version is lower.

gien wrote: »

I intend to use the money to pay for my daughter's uni fees in about 8-10 years time.

I also expect my children to be in the group that will have to pay them back since it's likely that they will be higher earners.

Bold prediction that your 8-10 year old daughter is going to be a high earner but nothing wrong with ambition

Is that a long enough investment do you think?

It's long enough for the first annual £6k which will have the full 8-10 years in which to ride the investment markets up and down, but the last half of the planned annual contributions will have four years or less and the very last year's investment may only have a matter of months before the intent is to spend it. Generally with timescales of only a few years, one would use cash rather than investments so you may need to consider investments at the less-risky end of the spectrum as the years roll by.

Basically people generally consider 8-10 years the low end of how long you should leave an investment to mature to give it a greater chance of delivering the 'expected' average returns. If you are drip feeding the money every year remember that each pound only has half that time invested (on average); so while your 2017 contributions have the chance to ride out a whole economic cycle before you will cash them in, the same might not be able to be said for the later amounts you're putting away.

So, you could pick a medium risk investment within your S&S ISA for the first year (knowing that it is only a relatively small part of the total amount you'll be planning to build up over the years) but perhaps a few years down the line start to use lower risk investments; you can change at will.

gien

Thanks Bowlhead, that's really useful insight. Yes, this year's amount will have 8-10 years to mature, but I'll have to think carefully next year and subsequently.

I guess I am ambitious for my children but they all seem to have the intellectual ability to do well and seem to have the drive to do well. Cynically, I also think that if things continue as they are, with the vast majority of student loans only being partially repaid, the government will pretty soon find ways of increasing the amount that they claw back from graduates. So, I think my youngest is more likely to end up repaying the lot that her older brothers perhaps....

greenglide

So, I think my youngest is more likely to end up repaying the lot that her older brothers perhaps....

But, of course, that depends on the subject being studied and the decision on the chosen career afterwards.

A brain surgeon who chooses to work in the 3rd world probably doesn't repay much of the student loan.

Choices such as research work in academia requires a high level of intelligence but often doesn't pay much.