Have I got this right? First time with S&S ISA

Otispunkmeyer

Getting ready to start an ISA and wanted to do a S&S ISA. I’ve been recommended Vanguard and either their Life Strategy or something like their FTSE Global All Cap.

Is it right however, that I can do it all through Vanguard but be limited to essentially Vanguards funds and ETFs. Or... go via someone like AJ Bell/ HL and have access to the same funds and much much more, but have to pay an extra level of fees?

I’ve got 5k to put in right away and probably could do 500/mo pretty easy.

I guess it wouldn’t hurt to maybe start with vanguards offerings and their lower fees for a year whilst I get more acquainted with this stuff?

Not afraid to be adventurous with this stuff. Wife has a good investment pot already. We both have good pensions and jobs, and small mortgage.

Thanks for the help!!!!

DrSyn

Yes you have got the idea.

If you go to Vanguard you will get the VLS , however you will only get their own products.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link

If you go AJ Bell/HL, etc you will be able to buy Vanguard and products from other financial companies as well. Just make sure that the platform actually has the product you want before starting your ISA with them.
Some platforms are better for small investors others for large investors, while some are better for buy and hold, others for frequent traders.

Costs are important and and vary between funds and platform.Also level of service varies I understand between platforms.

https://monevator.com/compare-uk-cheapest-online-brokers/

http://www.comparefundplatforms.com/


As you are just starting out investing the following may be of interest to you:-

http://www.kroijer.com/

https://www.ifa.com/indexfundsthemovie/

https://forums.moneysavingexpert.com/discussion/5879942/multi-asset-funds-differences&highlight=multi+asset

https://www.moneysavingexpert.com/savings/stocks-shares-isas/

MarkBargain

Vanguard's 0.15% platform fee is pretty low, £7.50 a year on your £5,000, £16.50 a year on £11,000, £25.50 on £16,000 etc.

I'm going with iWeb who charge £25 to join then £5 to trade. I'll put in £5,000 a time (rather than £500 a month) to keep fees low, so will work out around £5 a year for me after the first year.

benbay001

MarkBargain wrote: »

Vanguard's 0.15% platform fee is pretty low, £7.50 a year on your £5,000, £16.50 a year on £11,000, £25.50 on £16,000 etc.

I'm going with iWeb who charge £25 to join then £5 to trade. I'll put in £5,000 a time (rather than £500 a month) to keep fees low, so will work out around £5 a year for me after the first year.

I havnt crunched numbers but just want to point out that if you're saving £5k over a period and then investing in one chunk rather than investing dribs and drabs, the missed interest will probably be greater than £5 per month. Assuming FTSE average of 7%.

Otispunkmeyer

Thanks guys, will spend some time reading through those links. iWeb looks interesting....though at £5 a trade if you sling in monthly, it’s gonna cost you £60/year?

Presumably once you set up one S&S ISA you can’t have another (for the same financial year)?

Albermarle

Presumably once you set up one S&S ISA you can’t have another (for the same financial year)?

Correct , although you can transfer an older cash or S&S ISA into a newer one with no issues ( although if you want to stay invested in the same funds make sure they available first.

Alexland

Otispunkmeyer wrote: »

Thanks guys, will spend some time reading through those links. iWeb looks interesting....though at £5 a trade if you sling in monthly, it’s gonna cost you £60/year?

Yes if contributing monthly then Halifax Share Dealing at £12.50 pa + £2 per regular trade is a cheaper fixed price S&S ISA than iWeb. Still for now with only £5k and growing you would be better with Vanguard Investor percentage fee model until you get to around £25k.

If you don't need access to this money until retirement then consider additional pension or lifetime ISA (if under 40) contributions as they may be more advantageous.

Alex

arnoldy

Vanguard VLS are 'fund of funds' using their own funds. Therefore like any 'fund of funds' you get Layered Charges. Double usually. That's not specific to VLS - its an industry norm and they love it for obvious reasons. Also remember the OCF (Overall Charge) is in fact not an 'Overall Charge' at all. It does not include a single dealing cost when the fund buys or sells a share - this can be quite significant - stamp duty on a trade in UK is 0.5% for example, can be more or less in other countries. That's on top of the spreads and dealing costs.

DrHyde

FWIW, I'm sharing a thought on Vanguard Investor and why I think it's really good.
Not only is it cheap, but they embedded into their platform is a no-nonsense buy-and-hold philosophy. From behavioural economists we know that the best type of investor is the one who makes a decision to regularly invest in one or a number of funds (eg the world tracker or the 80% Lifestyle) and then forgets about this decision.
You could set up that payment within Vanguard Investor's platform and keep buying and keep holding - every month through good times and bad times. And you'll do OK.
You can take my word for it or read "Investing demystified" to come to the same conclusion.

MarkBargain

benbay001 wrote: »

I havnt crunched numbers but just want to point out that if you're saving £5k over a period and then investing in one chunk rather than investing dribs and drabs, the missed interest will probably be greater than £5 per month. Assuming FTSE average of 7%.

You are quite right to think of that. I have my cash invested elsewhere in savings accounts, so do earn some interest (up to 5% as per https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/) in the meantime.

jimjames

benbay001 wrote: »

I havnt crunched numbers but just want to point out that if you're saving £5k over a period and then investing in one chunk rather than investing dribs and drabs, the missed interest will probably be greater than £5 per month. Assuming FTSE average of 7%.

Just to correct the detail here. There is no interest paid on S&S ISAs. There are dividends and capital growth. Dividend rate on FTSE is around 3.5-4% currently.