Is investing now in a LISA a good idea?
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Zirconia
Posts: 13 Forumite
My son,with my encouragement, was going to start investing £4000 in a stocks and shares LISA before the end of the financial year.He was thinking of a stocks and shares option with Nutmeg to help with his retirement.This was before Corona.Is it still a good idea to launch a new LISA or should he wait? He is 37 and was going to invest £4000 per annum until age 50.
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If he was planning to do so anyway, and is looking long term, then yes, it makes sense to continue with that plan, although not many on here would advocate Nutmeg, given the better value for money available by using non-proprietary mainstream investments on lower cost platforms such as A J Bell.0
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Why Nutmeg ?An expensive and yet loss making platform.
If he was comfortable with the plan a few weeks ago then I don’t see why he should now postpone, there’s now a sale on stocks and shares.What do you think he should wait on ?0 -
Do AJ Bell do managed LISAs?.He has neither the confidence or the time to manage it himself.0
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I believe they do, but again, they attract high(er) fees.
Might I suggest he/you look into multi-asset funds suited to his risk profile, through AJ Bell or similar.It would be no more onerous to maintain than an investment in Nutmeg, fire and forget, if you will.1 -
The only thing with AJ Bell is that you would have to contribute in a big lump sum every year instead of in small bits every month (which shouldn't be an issue) because otherwise it will be more expensive than places like Hargreaves Lansdown.0
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afis1904 said:The only thing with AJ Bell is that you would have to contribute in a big lump sum every year instead of in small bits every month (which shouldn't be an issue) because otherwise it will be more expensive than places like Hargreaves Lansdown.2
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He could start with Nutmeg (almost invest and forget) and then transfer to AJ Bell once he gets more confident and as the account gets larger (so the lower or capped platform fee saving is much bigger than the trade costs) provided he opens the AJ Bell account before age 40 and they are still accepting inbound LISA transfers.
Nutmeg have FSCS protection up to £85k but they invest in ETFs with no protection. AJ Bell also have FSCS protection and you can choose to invest in FSCS protected funds or unprotected exchange traded assets such as ETFs for capped fees. Obviously you are never protected from normal stock market volatility.
P.s. it's also worth checking he is making good use of a pension especially if employer contributions or higher rate tax relief are available.1
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