New to investing - looking for tips

N1ckS

You may find this helpful to compare the cost of various platforms:
https://www.boringmoney.co.uk/calculator/?signupfrom=https://www.boringmoney.co.uk/learn/investing-guides/product-guides/online-investment-platforms/

steampowered

OliverNW3 wrote: »

A S&S ISA with them is £5 per month - is that considered good value?

I think it's good value. You can certainly go cheaper though. You can go to Vanguard direct these days.

With it being with these guys, rather than a bank, are they open to more risk, or as regulated as any bank?

What determines the risk is the underlying asset you are purchasing. The Share Centre (or your bank) are just providing a platform, they do not provide the actual investment you are buying. If the platform went bust you'd still own the investment.

I assume Vanguard are basically a competiitor to Share Center?

No, Vanguard provide the fund you invest in. Not the actual platform. Though I believe you can go to Vanguard direct these days for Vanguard funds.

iglad

That graph looks like my Lloyds share price over the past 20 years!!

londoninvestor

OliverNW3 wrote: »

A S&S ISA with them is £5 per month - is that considered good value?

No, it's poor value - it's more expensive than several competitors who provide no less good a service.

On top of the £5, Share Centre's standard plans have a punitive 1% fee for each trade, which you can remove, but only by paying an extra fee.

Halifax or iWeb both ought to work out cheaper. N1ckS's link above will be useful in finding the best deal for you.

Alexland

The right S&S ISA platform depends on your trade pattern and values.

Vanguard Investor are excellent for low value accounts because they only charge 0.15% (unless you want live ETF trading) although they have a minimum £500 lump sum or £100 per month requirement. However once you get to £40k you find yourself paying £60 pa in fees - ouch! If you want more investment choice than just Vanguard (and friends) then Cavendish are 0.25% and accept £50 per month. If you can only contribute £25 per month then HL are 0.45%.

For larger accounts with a regular monthly contribution into a single investment then Halifax Share Dealing are hard to beat at £12.50 pa plus £2 per scheduled trade (£36.50 pa).

But if you have a large account balance and/or only intend to trade occasionally for example twice a year then iWeb (operated by Halifax Share Dealing) are best value at £25 setup then £5 per trade (£10 pa) with no ongoing charges.

Alex

enthusiasticsaver

I think you need to do a lot more research and thinking about your immediate and long term goals. Definitely do not go to your bank as they are rarely good value with stocks and shares isas. There are lots of platforms you can use to start off with (some more expensive than others) but as I say do lots of research first. Vanguard is a fund manager and they do a lot of low cost passive funds at various levels of risk but there are others which do similar. Or you might want to go down the active funds route or use an IFA.

If you are likely to need money in the next five years to buy a property then investing may not be the right thing for you and you definitely need to think about your attitude to risk. How much would you be willing to see your money drop before you were tempted to cash out? 15%, 20% or higher? Proposing putting 100% into equities and then saying you are risk averse do not really go together. There are other less volatile funds.

I think I would be tempted to overpay into your pension as a first move as presumably you are a higher rate tax payer. 8% is a relatively low percentage for someone of 34 and you will gain more tax advantages with that. Is 3% the maximum your employer will pay?

OliverNW3

enthusiasticsaver wrote: »

If you are likely to need money in the next five years to buy a property then investing may not be the right thing for you and you definitely need to think about your attitude to risk. How much would you be willing to see your money drop before you were tempted to cash out? 15%, 20% or higher? Proposing putting 100% into equities and then saying you are risk averse do not really go together. There are other less volatile funds.

I think I would be tempted to overpay into your pension as a first move as presumably you are a higher rate tax payer. 8% is a relatively low percentage for someone of 34 and you will gain more tax advantages with that. Is 3% the maximum your employer will pay?

Thanks for your advice. I wouldn't be putting 100% of my savings in, I have about 26k saved, and am thinking of just ringfencing 10k as an investment and saying goodbye to it, and hoping that in 10/20 years it may have paid off. That would leave me with a pot of about 16k, and I would continue saving aggressively to help build a deposit, for when that time comes (I realistically don't see it coming very soon, but that could change if I met a partner and he wanted to invest in a property too).

My employer just told me that the minimum contributions are 3% from the employer and 5% for the employee, they haven't said if their 3% is a max - I've already asked them if they can increase mine, and will ask if they match it in some way if I do by increasing their contributions.

Alexland

Have you considered if the higher contribution limit (£4k per tax year) on the Lifetime ISA would give a bigger 25% bonus than you would achieve on the Help To Buy ISA (£200 per month)? A LISA needs to be open 12 months from initial deposit before you could buy a property upto £450k without penalty.

No point paying off the mortgage too quickly as it is likely to be a very cheap loan and over the long term suitable investments would be expected to perform better (after fees) and could be more tax efficient (eg using pensions).

OliverNW3

Yes, partly I was constrained by the fact that my bank is Ulster Bank (trying to change at the moment) and they only offered Cash ISA and H2B ISA, so I have both. 1000 minimum goes into the Cash ISA every month (this usually goes up by another 300), 200 (max allowed) into the H2B ISA, so on average I'm saving around 1500 monthly, about 50% of my take home pay. I feel like the interest rates I'm getting are abysmal anyway so I may as well shake it up and do something different. I may opt for a S&S ISA instead for the 10k I want to ringfence. Don't think I can have a LISA on top of that. I'll speak to First Direct as soon as I can get the account open.

ChasingSunshine

You can contribute to both a LISA and H2B ISA / Cash ISA in the same tax year so you can open a LISA now. You are not tied to your current bank as most/all providers will allow you to open an account without having a current account with them. Look at the LISA page on the main site. While there have a look at the best savings accounts / regular savings account page for ideas on maximising the interest rates available on your savings. Remember interest is tax free up to the annual savings allowance (£500 for higher rate tax payer) so non-ISA savings with higher interest are likely to work out better at the moment. The ISA allowance is use it or lose it however so if you are likely to have savings that take you over the tax free amount in the near future it might be worth keeping money in the ISA to protect that tax free status.

You might not be able to access all accounts as some require you to have three years UK residence (or at least they did when I first moved to UK). Lots of people on here have multiple current account that they shuffle money through each month to access linked regular savers or higher interest current accounts. Unlike in Ireland the majority of bank accounts in UK are free so there is no fee for having lots of accounts open at one time.

Regarding investing, maybe have a look at the monevator site so some basics on investing in the UK especially passive investing. You might want to do more research later as with everything the site is not without bias but think it is a really good place to start. They also have a broker comparison table with the costs of various brokers laid out, the best platform for you will vary depending on if you are planning to contribute regularly or simply put a lump sum in and forget it.

Finally, one other thing to think about as you are newly in the UK is building a credit history especially if you might eventually get a mortgage here. Things like being on the electoral register, have a UK credit card that is paid off every month etc but things like utilities in your name and sim only phone contract all help as well.