How to invest 45k - opening a new S&S ISA and transfer cash ISAs

isayhello

I'd like to open a S&S ISA for this year and put the full amount in. I also have over the past few years money from a few cash ISA's. I was wondering what would be the best way if I wanted to transfer some or all of those cash ISA funds into an S&S ISA or any recommendations of which platforms to do this on.
Am I able to open an S&S ISA this year with 20k in it, then still transfer a part or all of the cash ISA funds into it afterwards or would it be considered going over my allowance?
I was thinking of opening it with Vanguard.
Thanks for any help.

george4064

For platforms, some good webpages are: https://monevator.com/find-the-best-online-broker/ and https://www.amorge.co.uk/blog/which-platform-to-use

In terms of the £20,000 ISA allowance, this is only for new money added to an ISA. Because you are transferring money between one ISA to another you won’t be using up any allowance. Make sure you actually transfer your cash ISAs to your chosen S&S ISA the proper way to ensure your cash retains its ISA ‘status’, don’t withdraw/transfer the cash via your bank account and add it to your new ISA as this would count towards your ISA allowance as it would be classified as new money.

Hope that makes sense.

Alexland

Even if you want to invest in Vanguard fund(s) at that account valuation you may find that iWeb (run by Halifax) is cheaper at £25 setup and £5 per trade than paying Vanguard's ongoing 0.15% platform charge (£67.50 pa on £45k). iWeb have most of the Vanguard funds plus others that are sometimes cheaper and better.

isayhello

george4064 said:

For platforms, some good webpages are: https://monevator.com/find-the-best-online-broker/ and https://www.amorge.co.uk/blog/which-platform-to-use

In terms of the £20,000 ISA allowance, this is only for new money added to an ISA. Because you are transferring money between one ISA to another you won’t be using up any allowance. Make sure you actually transfer your cash ISAs to your chosen S&S ISA the proper way to ensure your cash retains its ISA ‘status’, don’t withdraw/transfer the cash via your bank account and add it to your new ISA as this would count towards your ISA allowance as it would be classified as new money.

Hope that makes sense.

Thanks for the links I will take a look @george4064 - what I mean is I would open a fresh S&S ISA with cash this year but I still have cash ISA's from before that I want to transfer after perhaps.

isayhello

Alexland said:

Even if you want to invest in Vanguard fund(s) at that account valuation you may find that iWeb (run by Halifax) is cheaper at £25 setup and £5 per trade than paying Vanguard's ongoing 0.15% platform charge (£67.50 pa on £45k). iWeb have most of the Vanguard funds plus others that are sometimes cheaper and better.

Thanks @Alexland I've heard iWeb seems to be popular on a few threads but I'd read that Vanguard is a good platform for a newbie investor and that also their fund charges are very low, they don't have any setup costs or trade fees either right?
If I was to pay a lower platform fee then why not some of the new apps such as Freetrade or Trading212 instead?

george4064

isayhello said:

george4064 said:

For platforms, some good webpages are: https://monevator.com/find-the-best-online-broker/ and https://www.amorge.co.uk/blog/which-platform-to-use

In terms of the £20,000 ISA allowance, this is only for new money added to an ISA. Because you are transferring money between one ISA to another you won’t be using up any allowance. Make sure you actually transfer your cash ISAs to your chosen S&S ISA the proper way to ensure your cash retains its ISA ‘status’, don’t withdraw/transfer the cash via your bank account and add it to your new ISA as this would count towards your ISA allowance as it would be classified as new money.

Hope that makes sense.

Thanks for the links I will take a look @george4064 - what I mean is I would open a fresh S&S ISA with cash this year but I still have cash ISA's from before that I want to transfer after perhaps.

Yes, that’s fine. The money you add from your bank account will use up your ISA allowance whilst any money you transfer from another ISA account will retain its ISA status and not use up any allowance for the tax year.

Alexland

isayhello said:

Thanks @Alexland I've heard iWeb seems to be popular on a few threads but I'd read that Vanguard is a good platform for a newbie investor and that also their fund charges are very low, they don't have any setup costs or trade fees either right?

iWeb has an old fashioned user interface but offers a much wider choice of investments. Most of the Vanguard funds are available to buy on iWeb (and the ongoing cost of the fund is the same if you buy it on Vanguard Investor or iWeb) so it depends on your valuation and trade pattern on if a percentage or fixed fee platform makes sense.

Generally percentage platform fees are good for accounts up to around £25k or where the portfolio holds a lot of different funds and fixed fees are better for larger accounts investing in a low number of funds. Sometimes it is much better to pay trade fees than ongoing percentage fees especially if you are in a position to make annual lump sum investments. If you calculate the fees difference betwen Vanguard Investor (at 0.15% pa) and iWeb (at £25 setup + £5/trade) over 3 years you might see the difference especially if you plan to make further annual lump sum investments. For large ISA accounts with regular investments then Halifax Share Dealing (at £12.50 pa + £2/reg trade) can be cheaper than iWeb.

The charges on Vanguard funds are generally low however there are often cheaper options available from other asset managers and this is where it can be beneficial to have a platform that offers broader choice so you can get the best from everyone. It's worth firming up on what you want to invest in before chosing a platform.

isayhello said:

If I was to pay a lower platform fee then why not some of the new apps such as Freetrade or Trading212 instead?

On this forum most of us tend to stick to established platforms with proven business models where they make enough money from running the accounts that they don't need to bait-and-switch you into gambling on CFDs etc. Still they both have FSCS protection (although it can be a lengthy process if they fail) but the exchange traded investments they offer wouldn't have any protection.

UpZord

would you then suggest drip feeding (over how long) or invest all at once in a vanguard world equities or multi asset etf?

Albermarle

but I'd read that Vanguard is a good platform for a newbie investor and that also their fund charges are very low, they don't have any setup costs or trade fees either right?
If I was to pay a lower platform fee then why not some of the new apps such as Freetrade or Trading212 instead?

Alexland has explained most of it but just to add, in case there is any confusion.

Do not mix up the platform costs with the fund costs.   Vanguard fund costs are exactly the same whichever platform you use , they are not cheaper on the Vanguard platform for example.

Also worth keeping in mind  that when total platform and fund costs are less than 0.5% , you are already at the low cost end of the market, so it is probably not worth worrying too much at this stage if you can shave off another 0.1% . In this case I would just go with the platform you prefer to use and I would stick with established suppliers like Vanguard , I web, AJ Bell etc  and not the maybe 'here today gone tomorrow' new apps.

Even easier but at slightly higher cost you could look at the HSBC platform amongst the many alternatives

https://www.hsbc.co.uk/investments/isas/

Alexland

UpZord said:

would you then suggest drip feeding (over how long) or invest all at once in a vanguard world equities or multi asset etf?

In terms of investment return historical analysis suggests you are better doing an upfront investment whenever the money is available rather than drip feeding however some people prefer to get into the pool gently spreading a lump sum over several months but that's not to say that the markets won't crash as soon as you have finished it. The main point is to invest within your tolerance range for seeing losses. So for example if you would get upset and perhaps make a behavioural error if seeing a 50% drop then you should go multi asset and hold bonds, gold, etc in suitable proportion which will help flatten the profile but likely at a lower overall long term return. Particularly important if you are getting closer to drawing on some or all of the money.

isayhello

Albermarle said:

but I'd read that Vanguard is a good platform for a newbie investor and that also their fund charges are very low, they don't have any setup costs or trade fees either right?
If I was to pay a lower platform fee then why not some of the new apps such as Freetrade or Trading212 instead?

Alexland has explained most of it but just to add, in case there is any confusion.

Do not mix up the platform costs with the fund costs.   Vanguard fund costs are exactly the same whichever platform you use , they are not cheaper on the Vanguard platform for example.

Also worth keeping in mind  that when total platform and fund costs are less than 0.5% , you are already at the low cost end of the market, so it is probably not worth worrying too much at this stage if you can shave off another 0.1% . In this case I would just go with the platform you prefer to use and I would stick with established suppliers like Vanguard , I web, AJ Bell etc  and not the maybe 'here today gone tomorrow' new apps.

Even easier but at slightly higher cost you could look at the HSBC platform amongst the many alternatives

https://www.hsbc.co.uk/investments/isas/

Thanks, I understand better now @Albermarle why do you recommend hsbc? what makes it easier?