Investing for beginners - Stocks and Shares Isa

Alexland

To celebrate the start of a new tax year today my wife and I just opened L&G S&S ISAs to get a total of £213 TopCashBack. We have gone with the £500 lump sum then £100 per month profile. Once the cashback goes payable we will stop paying the £100 per month but ensure the accounts have the required minimum £2,500 of contributions (over the 24 months) before the end of this tax year. Next tax year we will probably make our S&S ISA contributions elsewhere if another provider has a good signup offer. Then just after the minimum 24 months offer clawback period, transfer the L&G ISAs into our larger iWeb ISAs.

Next job is to start filling up our S&S LISAs...

carpy

Alexland said:

To celebrate the start of a new tax year today my wife and I just opened L&G S&S ISAs to get a total of £213 TopCashBack. We have gone with the £500 lump sum then £100 per month profile. Once the cashback goes payable we will stop paying the £100 per month but ensure the accounts have the required minimum £2,500 of contributions (over the 24 months) before the end of this tax year. Next tax year we will probably make our S&S ISA contributions elsewhere if another provider has a good signup offer. Then just after the minimum 24 months offer clawback period, transfer the L&G ISAs into our larger iWeb ISAs.

Next job is to start filling up our S&S LISAs...

No Vanguard?
What made you choose L&G as looking on TCB there are others with higher cashback?

george4064

carpy said:

Alexland said:

To celebrate the start of a new tax year today my wife and I just opened L&G S&S ISAs to get a total of £213 TopCashBack. We have gone with the £500 lump sum then £100 per month profile. Once the cashback goes payable we will stop paying the £100 per month but ensure the accounts have the required minimum £2,500 of contributions (over the 24 months) before the end of this tax year. Next tax year we will probably make our S&S ISA contributions elsewhere if another provider has a good signup offer. Then just after the minimum 24 months offer clawback period, transfer the L&G ISAs into our larger iWeb ISAs.

Next job is to start filling up our S&S LISAs...

No Vanguard?
What made you choose L&G as looking on TCB there are others with higher cashback?

I think there's more to it than; highest cashback = best option available.

Alexland

carpy said:

No Vanguard?
What made you choose L&G as looking on TCB there are others with higher cashback?

It's a balance between charges and cashback. Investing in 0.22% VLS on 0.15% Vanguard Investor would be a total of 0.37% so on £2.5k that would be £9.25 pa. Or investing in a L&G MI fund in a L&G ISA would be 0.61% so on £2.5k would be £15.25. So over 2 years I'd rather pay an extra 2x £6 (circa £10 as its a growing balance in year 1) to get £106.50 cashback. When we eventually transfer to our iWeb accounts that will cost an extra £5 to invest but we will have saved iWeb trade fees during this tax year.

If we want to add more than £2.5k into our S&S ISAs we would use the Cash ISA transfer into iWeb at the start of next tax year technique. However our main investment objectives for this tax year are pensions, LISAs and putting more in our youngest's JISA to match our eldest's JISA.

george4064 said:

I think there's more to it than; highest cashback = best option available.

Yes the Friendly Society ISAs tend to have very high fees and opaque returns/adjustments and the P2P ISAs are 100% loss risk. We already have capped accounts with Fidelity & AJ Bell and have done the Nutmeg offer already so wouldn't be eligible for their cashback.

Update: that's annoying Quidco have just extended their £20 opt-in bonus on signing up for an ISA with certain providers including L&G until midnight tonight. That offer was showing as expired this morning. Quidco are paying £1.50 less on L&G than TCB but that still would have been an extra £18.50 each. Bother.

Alex

Cam93

Alexland said:

To celebrate the start of a new tax year today my wife and I just opened L&G S&S ISAs to get a total of £213 TopCashBack. We have gone with the £500 lump sum then £100 per month profile. Once the cashback goes payable we will stop paying the £100 per month but ensure the accounts have the required minimum £2,500 of contributions (over the 24 months) before the end of this tax year. Next tax year we will probably make our S&S ISA contributions elsewhere if another provider has a good signup offer. Then just after the minimum 24 months offer clawback period, transfer the L&G ISAs into our larger iWeb ISAs.

Next job is to start filling up our S&S LISAs...

Thanks for this - didn't even know TCB offered this so I will open a L&G tonight for the 105 cashback.

Considering I already have a VLS80 what could be a good portfolio of L&Gs to go with ? 

Alexland

Cam93 said:

Thanks for this - didn't even know TCB offered this so I will open a L&G tonight for the 105 cashback.
Considering I already have a VLS80 what could be a good portfolio of L&Gs to go with ? 

See my update - Quidco have an opt-in £20 ISA offer so £125 total cashback.

There is no perfect match to VLS80 which is 80% equities and 20% bonds but L&G Multi Index 7 is currently 85% equities. 9% bonds, 6% property/other. Alternatively, L&G Multi Index 6 is currently 70% equities. 20% bonds, 7% property/other and 3% cash. Depends how much volatility you want.

carpy

Alex,
what would you do in the following situation?
i have £40k cash isa maturing 12th Apr and i'm thinking of investing all of it in a S&S isa.
would you still go with the L&G one to get the cashback or is there a better option at a lump sum investment at that amount?
thanks

Alexland

carpy said:

i have £40k cash isa maturing 12th Apr and i'm thinking of investing all of it in a S&S isa.
would you still go with the L&G one to get the cashback or is there a better option at a lump sum investment at that amount?

With that sort of money you would probably be better with a fixed price DIY platform than one with percentage platform charges. That's why I use iWeb (run by Halifax) to hold my larger historic ISA contributions.

e.g. L&G's 0.61% on £40k is £244 pa so £488 for 2 years minus the £135 cashback = £353

You could open an iWeb ISA for £25 setup and £5 for a trade and then use a multi asset fund such as VLS at 0.22% on £40k so the fund would cost you £88 pa. So your 2 year cost would be £25+£5+2x£88 = £206.

carpy

Alexland said:

carpy said:

i have £40k cash isa maturing 12th Apr and i'm thinking of investing all of it in a S&S isa.
would you still go with the L&G one to get the cashback or is there a better option at a lump sum investment at that amount?

With that sort of money you would probably be better with a fixed price DIY platform than one with percentage platform charges. That's why I use iWeb (run by Halifax) to hold my larger historic ISA contributions.

e.g. L&G's 0.61% on £40k is £244 pa so £488 for 2 years minus the £135 cashback = £353

You could open an iWeb ISA for £25 setup and £5 for a trade and then use a multi asset fund such as VLS at 0.22% on £40k so the fund would cost you £88 pa. So your 2 year cost would be £25+£5+2x£88 = £206.

unfortunately iweb are not currently accepting new applications. is there somewhere else i could use as an alternative or holding account until i could switch it over to iweb?

Alexland

carpy said:

unfortunately iweb are not currently accepting new applications. is there somewhere else i could use as an alternative or holding account until i could switch it over to iweb?

Oh - I see it's the same for Halifax Share Dealing too. These cashback offers are best for smaller accounts. Other fixed price platforms such as Interactive Investor are a bit expensive at £120 pa for a £40k investment. If you want to invest in funds that would also rule our Jarvis X-O or capped fees on AJ Bell, HL on Fidelity. You could just use Vanguard Investor at 0.15% until iWeb reopen applications? If you invest in a Vanguard fund available on both platforms then you should be able to transfer it later in-specie without any exit fees or time out of the market.