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Stock and Shares ISA - Saving question
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Tofolo
Posts: 5 Forumite
Hi
I would like to know a bit more about savings and the best way to do it. I would like to use stocks and shares but looking for some advice. I had a terrible experience with an ISA over ten years back as the financial crisis hit so i have just been working with cash since then. I overpay my mortgage so feel that is like a savings account as i will pay off early and save the interest which i should pay off in 10 years time.
I want to start saving a extra and have the following savings:
CASH
Chip Savings app (approx £50 a month) - Cash savings but helps me put a bit away that i dont really notice it gong into savings. 2% interest
Cleo savings app (approx £30 a month) - Same as chip but wanted to see if i prefer either one
Savings account (£0 a month but have a few grand in it) - with very low interest rate 0.1%
Nationwide regular saver (£250 a month) with 5% (ending soon)
Stocks and shares
eVestor app (£30 a month) - S&S ISA - Saving £30 a months in a stocks and shares ISA - so far its made 4.35% currently
Money Box (£50 a month) - GIA - Just started using. I wanted to see how it performs against the S&S ISA. Only started so no idea how it will perform
The question i have is - Should i be putting it all in the S&S ISA or is it okay to have an ISA and GIA for the reason i give? I wont be coming anywhere close to the ISA £20k limit but want to save money that is not in the mortgage. I like the spread as it gives me different risk levels on each and mixes cash and stocks. Should i be saving anywhere else?
FYI - I also save into my pension about 11% of my wage and my employer matches that 11% but wont go any higher on the matching.
I would like to know a bit more about savings and the best way to do it. I would like to use stocks and shares but looking for some advice. I had a terrible experience with an ISA over ten years back as the financial crisis hit so i have just been working with cash since then. I overpay my mortgage so feel that is like a savings account as i will pay off early and save the interest which i should pay off in 10 years time.
I want to start saving a extra and have the following savings:
CASH
Chip Savings app (approx £50 a month) - Cash savings but helps me put a bit away that i dont really notice it gong into savings. 2% interest
Cleo savings app (approx £30 a month) - Same as chip but wanted to see if i prefer either one
Savings account (£0 a month but have a few grand in it) - with very low interest rate 0.1%
Nationwide regular saver (£250 a month) with 5% (ending soon)
Stocks and shares
eVestor app (£30 a month) - S&S ISA - Saving £30 a months in a stocks and shares ISA - so far its made 4.35% currently
Money Box (£50 a month) - GIA - Just started using. I wanted to see how it performs against the S&S ISA. Only started so no idea how it will perform
The question i have is - Should i be putting it all in the S&S ISA or is it okay to have an ISA and GIA for the reason i give? I wont be coming anywhere close to the ISA £20k limit but want to save money that is not in the mortgage. I like the spread as it gives me different risk levels on each and mixes cash and stocks. Should i be saving anywhere else?
FYI - I also save into my pension about 11% of my wage and my employer matches that 11% but wont go any higher on the matching.
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Comments
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Stocks and shares
eVestor app (£30 a month) - S&S ISA - Saving £30 a months in a stocks and shares ISA - so far its made 4.35% currently
Money Box (£50 a month) - GIA - Just started using. I wanted to see how it performs against the S&S ISA. Only started so no idea how it will perform
The question i have is - Should i be putting it all in the S&S ISA or is it okay to have an ISA and GIA for the reason i give? I wont be coming anywhere close to the ISA £20k limit but want to save money that is not in the mortgage. I like the spread as it gives me different risk levels on each and mixes cash and stocks. Should i be saving anywhere else?
S&S ISAs and GIAs are both just wrappers, so can't be meaningfully compared, as in both cases they're entirely dependent on what you choose to buy within them.
S&S ISAs are generally preferred as they offer a number of advantages over unwrapped GIAs, including shielding investments from both income tax on dividends and capital gains tax on growth, which in turn means that with ISAs there's no need to maintain detailed records of all transactions for tax purposes.
The downside of S&S ISAs is that you can only pay into one in any given tax year. This isn't an issue for most people in your situation as they'd simply open an ISA with a platform and then buy different investments to fit their desired profile, or, more likely, buy one specific investment when just starting out, such as a global multi-asset fund, rather than tinkering with tiny amounts in multiple pots.
While costs aren't the be all and end all, you'll find that most on here will recommend using low cost mainstream platforms rather than app-based products that (a) offer limited investment choice and (b) typically entail higher costs that eat into profitability.0 -
Make sure you keep a big enough cash buffer as the problem with a mortgage is they might not give you the overpayment back if you needed it.
Neither of those S&S providers offer anything special or have low costs.
If you want to know how mainstream funds perform there is plenty of data on the Trustnet Charting Tool so there is no need to have multiple accounts I would suggest transfering the ISA to someone lower cost such as Vanguard Investor (who have a minimum of £500 balance or £100 per month), investing in a suitable fund then closing the GIA.
It does worry me about what happened 10 years ago - did you sell low and crystallise a loss? How much are you prepared to see you investment drop by as a percentage before you get too unhappy?
Also worth considering if additional pension contributions would be more beneficial?
Alex0 -
I would like to know a bit more about savings and the best way to do it. I would like to use stocks and shares
You SAVE cash into a savings account . You earn a guaranteed rate of interest and your money + interest will be returned at some point.
You INVEST in a stocks and shares ISA ( or similar ) . In the hope you will get a better return than in a savings account but you may also lose significant amounts of money ( as you know )
I also save into my pension about 11% of my wage and my employer matches that 11% but wont go any higher on the matching.0 -
I also save into my pension about 11% of my wage and my employer matches that 11% but wont go any higher on the matching.
Also to be pedantic again;) you do not save into a pension, you contribute to it.0 -
Albermarle wrote: »You should be careful with the terminology .
You SAVE cash into a savings account . You earn a guaranteed rate of interest and your money + interest will be returned at some point.
You INVEST in a stocks and shares ISA ( or similar ) . In the hope you will get a better return than in a savings account but you may also lose significant amounts of money ( as you know )
I also save into my pension about 11% of my wage and my employer matches that 11% but wont go any higher on the matching.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
Investing can be as simple or complicated as you like to make it.
You could just do this.
1. Watch both of these first:-
http://www.kroijer.com/
https://www.ifa.com/indexfundsthemovie/
2. Now consider investing in a global multi asset fund at a risk grade you are happy with. Either of these two below would do, as they both have wide diversification while minimising risk, at low cost.
https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link
https://www.hsbc.co.uk/investments/isas/hsbc-global-strategy-portfolios/
If you can not decide on which risk rating, I suggest going for the balanced option.
Invest via the stocks & shares ISA. Forget about the GIA.
If you decide on the VLS, consider using a Vanguard account:-
https://secure.vanguardinvestor.co.uk/en-GB/Process/Registration/Apply/Select
3. Now get on with life and do not tinker with the investment.0 -
Thank you everyone.
I will note the difference between saving and investing
I take the general advice to ditch the GIA and focus on one s&s isa. I will also look at the guides and suggestions for better providers.
My last experience was to watch £2k drop over 30% and then 5 years later was still below the 2k starting point. I cut my lessens and took the cash.
Mortgage has no borrow back but has holidays and lower payments based on the overpayment reserve.
Thanks again for the range of feedback0 -
My last experience was to watch £2k drop over 30% and then 5 years later was still below the 2k starting point. I cut my lessens and took the cash.
Part of the discipline of regular investing is to keep doing it even when the stock market crashes. You’ll buy more units/shares when the market is low giving you a big boost when the market rises.
I’ve regularly invested since before Black Monday in 1987, and I’ve just held my nerve through the bad times. It has paid off handsomely. I’ve avoided bubbles by sticking to well balanced index funds and general investment trusts. It has worked for me.0 -
Technically, saving in a savings account, investing in a pension, and contributing to a pension are all forms of saving. In fact, for economists, investment (buying machines or building a factory) is something done by firms. Consumers save and firms invest. If you are going to be pedantic then it might help to know what you are talking about!
However some of the inexperienced posters on here are completely confused between safe savings and risk based 'savings ' so it helps to be able to clarify the difference for them.0
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