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

isayhello

Alexland said:

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.

Thanks @Alexland that helps. I feel I'm going to be in a middle ground where I'll have a pot of around 45k-50k once opening the new ISA and transferring previous years so in this case am I comparing a 0.15% fee with Vanguard on that against £25 + £5/trade fee with iWeb?

I take your point that another platform than Vanguard opens me up to much more choice which I would appreciate but maybe it's a good idea to keep just 20k in Vanguard and open a separate ISA withe previous years money into iWeb and explore both? does that sound wise? or is it better to keep all the funds together to make them work better?

Alexland

Assuming you are investing the £45k in a single fund such as the Vanguard LifeStrategy series (0.22% fund charge) for 3 years then doing that on iWeb would cost you £25 setup plus two £5 trades (one for the transfer and another for the lump sum contribution assuming you don't invest them both at once) = £35 compared to 3 x 0.15% x £45k = £202.5 on Vanguard Investor platform. Obviously it's better to invest for much longer than 3 years to ride out any dips.

If making further large contributions in the subsequent tax years as annual lump sums iWeb might cost you another couple of £5 trades but Vanguard would cost you even more with the 0.15% pa on the additional contributions.

If your future contribution pattern is likely to be monthly then those £5 trades could get significant (eg £60 pa) so consider either Halifax Share Dealing or you can arbitrage the Vanguard/iWeb charging models by making regular contributions into Vanguard (on percentage charges) and then transferring the ISA/assets to iWeb (on fixed charges) after each tax year to bring your platform costs down to just £16 pa:

https://monevator.com/cheapest-stocks-and-shares-isa-hack/

Alex