My savings are depleting in huge amounts now!!

Rizziah

Hi guys,
So I'm starting to get worried- as a rule I tend not to log into my Scottish widows ISA too often. A) because I have no clue about finances and B ) when its value goes down I have no idea what to do. (Which is why I have had to come on here!!!)
So 10 years ago I put a lump sum in of £10k and set up a direct debit of £200 pm. (This is all meant to be long term for when i should be ready to retire in another 15 years)
I understand with a medium risk (4) ISA that my money is used to buy stocks & shares and that obviosly the market fluctuates so some months I do make a loss, but its only ever been a few £100 (which actually is a lot for me as I am a poor, underpaid teacher), but other months my loss is returned.
Howeverrrrrrrrr, last month I was down £1k and today my total was down by another £3k!!!! And I have no idea what to do....this is my pension!
Do I wait it out, and maybe at the end of this pandemic hope that the market will bounce back and I'll make my loss back- or do I remove my money? 

Please could you give me some advice on what to do (bearing in mind that I am not financially astute)
Many thanks (in advance)
R

eskbanker

Buying high and selling low isn't a recipe for investment success, so selling now is best avoided unless you have a desperate need to access the money, which it sounds like you don't.

It seems like you'd benefit from understanding more about risk and exactly what you're invested in - you'll doubtless be familiar with the well-known phrase about how investments can go down as well as up and we happen to be in a 'down' bit at the moment.  However, this is to be expected and happens multiple times over the investment lifecycle, so it's not a reason to panic, when there's every likelihood that prices will recover.

Why haven't you been using proper pensions for putting money aside for retirement?  Do you have the option of contributing more to your workplace scheme, possibly with more employer contributions?

Thrugelmir

How much is your fund now worth?  That's what matters. Markets have had an exceptional run. Gains need to be into context. 
Unfortunately the greater the value of the fund the larger the swings will be. 

[Deleted User]

Rizziah said:

Hi guys,
So I'm starting to get worried- as a rule I tend not to log into my Scottish widows ISA too often. A) because I have no clue about finances and B ) when its value goes down I have no idea what to do. (Which is why I have had to come on here!!!)
So 10 years ago I put a lump sum in of £10k and set up a direct debit of £200 pm. (This is all meant to be long term for when i should be ready to retire in another 15 years)
I understand with a medium risk (4) ISA that my money is used to buy stocks & shares and that obviosly the market fluctuates so some months I do make a loss, but its only ever been a few £100 (which actually is a lot for me as I am a poor, underpaid teacher), but other months my loss is returned.
Howeverrrrrrrrr, last month I was down £1k and today my total was down by another £3k!!!! And I have no idea what to do....this is my pension!
Do I wait it out, and maybe at the end of this pandemic hope that the market will bounce back and I'll make my loss back- or do I remove my money? 

Please could you give me some advice on what to do (bearing in mind that I am not financially astute)
Many thanks (in advance)
R

Hi,
This is obviously a long term investment for you. You haven't stated what this 'index fund' is linked to? By the looks of it you would have more shares than bonds.
The FTSE 100 etc are being crippled at the moment due to obvious reasons.
Wait it out. History states that the economy always bounces back.
Its slightly different this time although I wouldn't be too worried.

cleoeasta

My son (who has autism) just turned 18 in January. We had been saving a bit every month into the govt recommended junior isa scheme. They wrote & said is £6.8k in 19 Feb. It took us a while to get him to nationwide to get a new isa but when I checked yesterday to transfer his kids savings one into a new “adult” one (which we will have to help him manage) the amount had dropped to £5.3k. That’s 2 years worth of our savings in a month. I have seen the “can go up aswell as down” text but not sure what to do now. Feel a bit cross that govt we’re promoting such a risky saving process tbh. Anyhow I’d it best to just “leave it” until market comes back? I’m not sure what to do.

Alexland

When investing in S&S products its really important to have an assumption on when the money will be withdrawn to be spent as the asset allocation needs gradually de-risking years advance such that the impact of markets crashing doesn't case material damage to the investment outcome. If your son doesn't need to withdraw the money, and assuming the investment is sensible, then historically the best answer has been to leave it for the likely recovery.

masonic

Moving it to a S&S ISA with broadly the same investments would be the default option, unless, as Alex says, the money will be used imminently. It may be worth looking in the context of total money paid in rather than what it was worth a month ago. Hard to comment further without knowing the investment(s) chosen.

Alexland

masonic said:

Moving it to a S&S ISA with broadly the same investments would be the default option, unless, as Alex says, the money will be used imminently.

Surely the JISA would have already matured into an adult S&S ISA on the 18th birthday in January and remained invested in order to have suffered from the recent crash? As such if the son doesn't need the money for now they could probably do nothing and wait for the recovery however long that takes?

Rizziah

Thank you very much for taking the time out to reply, i'll take your advice a keep it there for now and pray for the best
xoxo

eskbanker

cleoeasta said:

We had been saving a bit every month into the govt recommended junior isa scheme.
[...]
Feel a bit cross that govt we’re promoting such a risky saving process tbh.

ISAs, including junior ones, are correctly described as tax-free ways of saving or investing but aren't recommended or promoted by the government!  They also don't remove the obligation from the buyer to check that the chosen product is suitable for their needs, and it remains important to distinguish between deposit-protected savings and capital-at-risk investments, either of which can be held within (J)ISAs....

masonic

Alexland said:

masonic said:

Moving it to a S&S ISA with broadly the same investments would be the default option, unless, as Alex says, the money will be used imminently.

Surely the JISA would have already matured into an adult S&S ISA on the 18th birthday in January and remained invested in order to have suffered from the recent crash? As such if the son doesn't need the money for now they could probably do nothing and wait for the recovery however long that takes?

You are of course correct, I was thinking for some reason some action needed to be taken to choose between maturity options (cash ISA vs S&S ISA), but it appears this is just a transfer from the S&S ISA to a cash ISA that's being considered.