Not a bad idea, right?

threlkeld53

I made a thread a few months ago about opening a S&S ISA, but since then circumstances have changed.......


In a nutshell I'm 67, retired and living off a small pension, plus state pension. I have savings of around £100k earning around 1% in various banks and building societies.

I recently received an unexpected windfall of £40k. Don't particularly need it in the near future as I have a safe back-up with the above-mentioned savings. Never having had an ISA before, I thought of opening one with iweb and putting in £10k each to Vanguard LS60 and HSBC Global Strategy Balanced, during this current tax year. The remaining £20k from the windfall I could put into an easy access account until April 2021 and then add it to the two funds in the ISA. By then I'd have £40k invested in the ISA and would be happy to keep it there for approx 10 years.

Investing is new to me and I'm quite risk-averse. I wish I could have done more years ago. But I didn't. One cannot turn the clocks back, apart from the maximum of one hour next week!

Edit

msallen

Seems fair enough to me. I assume you've weighed up the various levels of potential risk/reward of funds to arrive those choices and are going in with your eyes open.

threlkeld53

msallen said:

Seems fair enough to me. I assume you've weighed up the various levels of potential risk/reward of funds to arrive those choices and are going in with your eyes open.

Yes I have, thanks.
Both funds are made up with about 60% in equities which I feel comfortable with, rather than going for the riskier VLS80 or VLS100. I'm also aware that the Vanguard LifeStrategies have more weight in this country compared to HSBC. 

Albermarle

Also VLS funds have a fixed % equity whereas as the HSBC fund is risk targeted , so another reason to have both just to average out performance .

AlanP_2

Are you putting £2880 nett into a pension and benefitting from the £720 HMRC top it up by to arrive at £3600 gross?

25% tax free on withdrawal which means if you pay income tax on it the effective rate is 15% giving you a 6.25% overall return.

Can be done each year until Age 75.

threlkeld53

AlanP_2 said:

Are you putting £2880 nett into a pension and benefitting from the £720 HMRC top it up by to arrive at £3600 gross?

25% tax free on withdrawal which means if you pay income tax on it the effective rate is 15% giving you a 6.25% overall return.

Can be done each year until Age 75.

Yes I am indeed!