Vanguard - advice

30andcounting

Hi

30yr old male looking for some investing advice. I have some money in easy access savings but looking to put something away for the future to not touch...starting with £100 per month, I have looked at a Vanguard Life Strategy ISA. At my age should I be going for something more geared up to equity? I was looking to start with either the 60/80 or 100% equity.

Anyone had any experience of this and what would you do in my position considering age and relatively new to investing.

Thanks

El_Torro

When do you want to access your money? If it's when you retire I'd go for the VLS 80 or 100. I would say that VLS 60 is more for if you think you might dip into it in the next 5-10 years.

Neil1344

I am in same situation as you, having decided on LS fund for longer term investment of a lump sum. I am 46 years old and have gone for LS80 , knowing I won’t need to touch the money for at least 10 years. With your age and it being a long term investment drip fed on a monthly basis I would definitely be comfortable with LS80 at the very least.

Alexland

Assuming you want to invest for the long term 15+ years and are comfortable to see paper losses of around 40% occasionally then VLS80 via Vanguard Investor is a good choice. Remember to reduce risk as you get closer to withdrawal to avoid selling low.

Also consider if additional pension or S&S Lifetime ISA contributions may be more beneficial.

Alex

30andcounting

El_Torro wrote: »

When do you want to access your money? If it's when you retire I'd go for the VLS 80 or 100. I would say that VLS 60 is more for if you think you might dip into it in the next 5-10 years.

Not sure on access - I'd say at least 10-15 years. But you never know?

Alexland wrote: »

Assuming you want to invest for the long term 15+ years and are comfortable to see paper losses of around 40% occasionally then VLS80 via Vanguard Investor is a good choice. Remember to reduce risk as you get closer to withdrawal to avoid selling low.

Also consider if additional pension or S&S Lifetime ISA contributions may be more beneficial.

Alex

I have a work based pension between me and employer putting 10% in on a £57K salary. Happy with those contributions atm, just wanted something other than normal savings to invest a small amount in each month and be able to access in desperate measures (hopefully not of course)

Thanks

Alexland

It sounds like you are paying some 40% tax which could be avoided if you increased your pension contribution? 10% isn't really enough to meet most people's retirement aspirations.

30andcounting

Alexland wrote: »

It sounds like you are paying some 40% tax which could be avoided if you increased your pension contribution? 10% isn't really enough to meet most people's retirement aspirations.

Probably - how can I model it to see what tax I will pay? and the effect on net pay. I also have childcare vouchers of £124 a month which reduces my taxable income by £1,488. My wife gets child benefit but until my accountant does my tax return I guess I wont know what I need to do..

Thanks

ColdIron

30andcounting wrote: »

just wanted something other than normal savings to invest a small amount in each month and be able to access in desperate measures (hopefully not of course)

The trouble with desperate measures is that you cannot choose when they occur and market conditions may work against you. You need to be clearer in your own head about what you are trying to achieve. Cash would be more suitable for an emergency fund

30andcounting

ColdIron wrote: »

The trouble with desperate measures is that you cannot choose when they occur and market conditions may work against you. You need to be clearer in your own head about what you are trying to achieve. Cash would be more suitable for an emergency fund

I have an emergency fund

Harvic

In addition to the above comments; if you've not bought a house and think you will in the next few years consider LISA. With the 25% bonus it will likely outperform anything else short-mid term.

Alexland

30andcounting wrote: »

Probably - how can I model it to see what tax I will pay? and the effect on net pay. I also have childcare vouchers of £124 a month which reduces my taxable income by £1,488. My wife gets child benefit but until my accountant does my tax return I guess I wont know what I need to do.

This tax year, for most of those in the UK but not Scotland, the first £12,500 of earnings are tax free, the next £37,500 is taxed at 20% and anything above £50,000 is at 40%. In addition the government start clawing back a proportion of child benefit if one of you earns between £50,000 and £60,000 after which it's all gone.

As such it can be particularly advantageous to make additional voluntary pension contributions to get your adjusted earnings below £50,000 as it saves 40% tax, 2% national insurance (if your employer operates salary sacrifice) and 18% child benefit (if you have 2 children). You need to consider any taxable benefits (such as medical cover, car allowance, etc) and bonuses in the calculations.

In this low return environment being low cost and tax efficient is very worthwhile.

Alex