Nationwide ISA Stocks & Shares or Funds?

leejenson

Hi,


I see on Nationwide (my current bank) that they have a Stocks and Shares ISA and also I could invest in funds via another mechanism but via Nationwide.


I earn £22,000 and I currently put £500 a month in a Nationwide Regular Savings Account. I am thinking on splitting this and making some regular payments into stocks and shares via one of the above.


With the funds I feel ok about choosing the high risk option but with the ISA I think there are no fees and no tax but possibly lower risk?


Are my statements accurate the account difference?


Many thanks


Lee

AlanP_2

Not sure whtat Nationwide offer but you seem to be mixing up the invetsment choice (fund, individual companies shares etc) with the "tax wrapper" you can put them in (ISA - no tax on dividends or on capital growth).

Think of an ISA as an empty bucket that you can put to £20k a year of investments in to.

You can do this through a range of intermediaries or platforms such as Nationwide (although I would doubt if they are the cheapest).

There will be fees to pay somewhere in the process. Funds charge a fee, platforms charge a fee based on overall pot size or per transcation.

There will also be risks, investments go up and down in value with the longer term trend being upwards whiich is why investments are normally looked upon as a longer term (minimum 5 years say) option. If you think you might want to sell and spend the cash in less than that it may not be the right thing to do.

Lots of information on the monevator.com website and on here. Keep reading and keep asking.

Alexland

You don't need to have your ISA with your bank you can shop around and get one elsewhere. It can still usually be funded via direct debit or lump sum from your bank.

I don't see any compelling reason to invest with Nationwide when, for example, you could get much lower fees and better investment choices direct with Vanguard Investor who also offer an ISA wrapper.

Vanguard are a bit like a building society in the world of investments. They are not for profit, owned by their customers (ok the US customers, but to no disadvantage to UK customers) and huge. I loose track on if they have overtaken Blackrock to be the world's biggest fund manager yet but it's due anyday soon.

https://www.vanguardinvestor.co.uk

Particularly worth looking at their LifeStrategy funds:

https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products

Vanguard charge a platform fee of 0.15% and LifeStrategy has a fund fee of 0.22% so a total of 0.37%. There are no trading fees or penalty charges and the website is very easy to use.

The cheapest option on Nationwide I could find is 0.77% pa and that's a basic FTSE All Share tracker (which Vanguard would do for 0.15% platform and 0.08% fund fee so 0.23% total) offering very limited diversification. I can't imagine why anyone would want to track this index as their only investment.

The next cheapest options are all over 1%. So if the stock markets deliver 5% long term and inflation is running at 3% your return above inflation is 2% - of which roughly 50% will be taken by Nationwide. They would get paid this big fee in both the good and bad years and they're not the ones risking their money!!

Alex.

A_T

Nationwide S&S ISA is actually with Legal and General - Nationwide just act as a kind of reseller.

As Alexland says the fees are high and you can get something more or less the same but cheaper with Vanguard or even Hargreaves Lansdown.

droopsnoot

I have an S&S ISA that I started through Nationwide quite a few years ago. The biggest issue with it is that the choice of funds offered is very limited.


If you look around at the various posts on here where people offer suggestions as to which funds might be considered as good investments, pretty much none of those were available through the Nationwide / L&G S&S ISA, last time I looked. I really only still have mine through lethargy.

Alexland

In which case you are probably their ideal customer.

If Nationwide really had their members interests at heart they wouldn't offer such unappealing products. It would be better offering nothing at all and just pointing members to other providers who can compete in this market.

Malthusian

Alexland wrote: »

If Nationwide really had their members interests at heart they wouldn't offer such unappealing products. It would be better offering nothing at all and just pointing members to other providers who can compete in this market.

Ah but by raking excessive fees off a few lethargic customers they have more money for the rest of its members to share in... somehow.

The needs of the many outweigh the needs of the few, comrade.

leejenson

Thank you all for helping me learn about this space in finance. I was just leaning towards the Nationwide because I trust them. But given their high fees, trust I see cannot be a sole driver.


I will read this forum on this topic some more and see what others are doing.




Thanks , mega advice


Lee

Alexland

No problem - just to add that the Nationwide Flex Direct and 5% regular saver are both very good products which I frequently recommend.

The trick is to assess each product on its merits for your situation. A provider that is good with one product might be weak with another. And a product that is good for one person might not meet the requirements of another.

Alex