Investment on lump sum

missymouse

hi

I would like to invest a lump sum wisely
I have a nutmeg investment S&S  account which I drip feed into. Would it be a good idea to put some of it in this to take it up to £20K before April. I’m unsure if it is that great with the investment charges. Any thoughts on Nutmeg?

I may do a different S&S isa after April e.g. Vanguard and leave this investment dormant or would you put money in a high interest  (ha ha) savings account and wait till April.

I don’t need the money but feel overwhelmed 

thanks

Mr.Saver

Any thoughts on Nutmeg?

Expensive for small sum, very expensive for large sum (>£25k). A simple Vanguard LifeStrategy fund hold on a cheap investment platform would do the same thing as their "fixed allocation style" for a much lower fee, and have a very high probability of beating their "fully managed style" over the long run. (due to their 0.75% fees)

The only good thing about it is, it hides all those details from the investor (you), so you don't need to understand how it works.

I may do a different S&S isa after April e.g. Vanguard and leave this investment dormant or would you put money in a high interest  (ha ha) savings account and wait till April.

If that's what you'd like to do, I'd suggest you put all the money into an ISA right now (Nutmeg, or a cash ISA) to use this year's allowance, and then transfer them to Vanguard after 6 April.

BTW, statistically, and historically, investing the lump sum at the beginning instead of drip feeding (aka pound cost averaging) has a better chance to earn higher returns on it.

missymouse

Thanks 

so would you close the Nutmeg account completely? I’ve had it since 2016

i feel nervous about vanguard.

any advice on instant or notice access accounts as I have other cash to invest.

I cannot put any money in my cash ISA

xylophone

 feel nervous about vanguard.

Why? https://monevator.com/using-vanguard-lifestrategy-funds-life/

 instant or notice access accounts as I have other cash to invest.

Save rather than invest? Slim pickings, I fear.

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

Mr.Saver

missymouse said:

so would you close the Nutmeg account completely? I’ve had it since 2016

 Corporations don't reward their loyalty customers, instead, they exploit them.

missymouse said:

i feel nervous about vanguard.

I guess that's because you don't know much about Vanguard. But let's be honest, how much did you know about Nutmeg back in 2016?

missymouse said:

any advice on instant or notice access accounts as I have other cash to invest.

This is an Internet forum, we can't offer advices. Notice savings accounts, as the name suggested, are savings accounts, not investments. I'd assume you meant that you have cash to save. You can find the best savings accounts (in terms of interest rate) on the MSE's Top Savings Accounts page. The page contains the best easy access, notice and fixed savings accounts.

missymouse said:

I cannot put any money in my cash ISA

Was that because you have reached the ISA annual allowance of 20k? Or you have a HTB ISA or a fixed term cash ISA that you can't top up? You should use your ISA allowance before the end of this tax year. As everyone says, you'd either use it or lose it.

missymouse

I thought Nutmeg was ok tbh.  Could I leave my investment in Nutmeg and then open a vanguard next tax year.
or would you stick 20k in this tax year, then move in April to Vanguard and then add another 20K
yes, I meant savings

missymouse

Yes unluckily chose a closed cash isa last March and didn’t realise I couldn’t top it up this last tax year. 

Mr.Saver

missymouse said:

I thought Nutmeg was ok tbh.

Then you probably should learn a bit more of Vanguard. I'll leave the Wikipedia page for you to read: https://en.wikipedia.org/wiki/The_Vanguard_Group
In short, Vanguard was established way earlier than Nutmeg, is an index fund pioneer, and has much more asset under management than Nutmeg. If you can trust Nutmeg with your money, there's no reason you can't trust Vanguard too.

missymouse said:

Could I leave my investment in Nutmeg and then open a vanguard next tax year.

Yes, you can. But will you be able to use this year's ISA allowance elsewhere? You said cash ISA isn't an option for you, and you don't want to add more money the Nutmeg S&S ISA. It sounds like you are going to give up the allowance for no good reason. Remember, if you don't use this year's ISA allowance before 6 April, you will lose it forever.

missymouse said:

or would you stick 20k in this tax year, then move in April to Vanguard and then add another 20K

Yes, I would. But wait, you said "20k". Does that mean you haven't added any money to the Nutmeg ISA this tax year? If that's the case, you can open a Vanguard ISA right now, and put 20k into it while keeping the Nutmeg ISA. Otherwise, if I'm in your situation, I'd put the maximum I'm allowed to into Nutmeg right now, and then open a Vanguard S&S ISA on the same day. Once the Vanguard S&S ISA is opened, I'd start the ISA transfer immediately. Regardless of the ISA transfer complete before or after 5 April, I'd have used all of my 20k ISA allowance in this tax year, and will be able to use all of my allowance in the next year. The only down side is probably a bit of transaction cost on the Nutmeg side, because they would need to buy the investments after they received the money, and then sell in a month or two for the ISA transfer. That's a small price to pay for the bad timing at the end of a tax year. It's better to pay the small price than lose the allowance.

missymouse said:

Yes unluckily chose a closed cash isa last March and didn’t realise I couldn’t top it up this last tax year. 

Wait, you said last March. Since you haven't put any new money into that cash ISA in this tax year (6 April 2019 to 5 April 2020), you are allowed to open a new cash ISA and put money into it. Perhaps this will help you understand it better: https://www.moneysavingexpert.com/savings/best-cash-isa/#accordion-content-0334234523-2

How many ISAs can you have?
According to HM Revenue & Customs rules, you can only have one current year's cash ISA open at any time. But you can have several old ones with several different providers, or you can have a cash ISA, a stocks & shares ISA, an innovative finance ISA and a Lifetime ISA at the same time.

So if you opened a cash ISA with Barclays two years ago, you don't need to stick with it for this year's cash ISA – you can choose whichever the top payer is.

missymouse

Thanks for your detailed reply.

i will think about it

if I do transfer over to Vanguard , is there any costs.

Mr.Saver

missymouse said:

Thanks for your detailed reply.

i will think about it

if I do transfer over to Vanguard , is there any costs.

Nutmeg doesn't charge any exit fee. So the answer is no, there's no cost to do the ISA transfer from Nutmeg to Vanguard Investor.

missymouse

Mind you, the stock market is slightly shaky at the moment