cash LISA + fund investment for retirement?

TheLittleSaver

Dh6 said:

I’m using AJ bell and invested in HSBC all world tracker. I too wanted initially to hold it as cash and just use it to get the 25% bonus but it makes no sense if I’m going to hold it for another 27 years! 

I see, so you are not using their packages, but made an investment by yourself. What made you choose investing in the HSBC all world tracker, rather than getting, let's say, their "income" or "adventurous" package?

kinger101

TheLittleSaver said:

kinger101 said:

It would help people if you explained what you need money for (house/retirement) and whether you pay higher rate tax.

So, from what I can understand, you are suggesting to ONLY have a Vanguard LifeStrategy 80, putting all my savings (minus some cash for emergency fund) into it?

That's what I'd do in your scenario, though using the all-world tracker (like dh6 suggests) instead of VLS80.  I wouldn't regard VLS80 as a bad choice though.  It's low cost and diversified which are the main points. I just think 100 % equities is better that far from retirement, and don't like the UK bias of the VLS series.

There are a few things to bear in mind though - most notably that assets in a LISA are regarded as being accessible  money by HM Government affecting means-tested benefits, by creditors if you went bankrupt, and also form part of one's estate for IHT.  So LISA is likely to be the best option for most people in your scenario, but unforeseeable circumstances can make it a bad choice.  There is another option that might be open to you (you'd need to discuss with an accountant to weigh up pros and cons).  That's incorporating your business and getting that to make pension payments on your behalf.  

Alexland

EQi are currently the cheapest S&S LlSA platform for investing in funds and offer access to both the VLS fund series and the HSBC FTSE All World (100% equities) fund.
https://eqi.co.uk/info/lifetime-isa/benefits

eskbanker

TheLittleSaver said:

Dh6 said:

I’m using AJ bell and invested in HSBC all world tracker. I too wanted initially to hold it as cash and just use it to get the 25% bonus but it makes no sense if I’m going to hold it for another 27 years! 

I see, so you are not using their packages, but made an investment by yourself. What made you choose investing in the HSBC all world tracker, rather than getting, let's say, their "income" or "adventurous" package?

Dh6 can obviously explain their rationale but one significant differentiator is cost (OCF), with the HSBC tracker being 0.13% and the proprietary packaged portfolios being in 0.86% territory....

TheLittleSaver

Alexland said:

EQi are currently the cheapest S&S LlSA platform for investing in funds and offer access to both the VLS fund series and the HSBC FTSE All World (100% equities) fund.
https://eqi.co.uk/info/lifetime-isa/benefits

Thanks Alexland for bringing that up, althgough I see that there are quite a few people not very happy with their service (according to truspilot)? So perhaps it would be better to use AjBell which might cost more, but at least it's been around for a long time and people are generally happy with it? Or perhaps you are using EQi and can vouch for them?

kinger101 said:

There is another option that might be open to you (you'd need to discuss with an accountant to weigh up pros and cons).  That's incorporating your business and getting that to make pension payments on your behalf.  

I believe that is not a viable option for me, I had a conversation with my accountant some time ago about getting LTd, and they told me that I should earn more to make it worth it.

So far I see the general consensus being to invest in equities, so I might go for a similar route than Dh6, probably using AJBell too.

Anyway I will keep thinking about it, so please keep the suggestions coming! I don't want to miss anything.

Alexland

TheLittleSaver said:

Thanks Alexland for bringing that up, althgough I see that there are quite a few people not very happy with their service (according to truspilot)? So perhaps it would be better to use AjBell which might cost more, but at least it's been around for a long time and people are generally happy with it? Or perhaps you are using EQi and can vouch for them?

I wouldn't put any faith in trustpilot reviews as they can be manipulated and outright scams seem to have the best reviews.
The service at AJ Bell is certainly good but we don't hear anything bad about EQi on these forums either.
Our circa £25k each LISAs are still at AJ Bell as we are getting the capped ongoing fees for holding an ETF but still with a few £1.50 scheduled trade fees it is costing us around £20 pa each more than EQi. Problem is you can't move an existing LISA to EQi without selling down the investment (or still being under 40, one of us isn't) and I would rather we stayed invested so are sticking with AJ Bell.
We already have good pensions so our LISAs are mostly to help our young kids with house deposits etc.

TheLittleSaver

I see. One more thing. If I open my LISA with AJ Bell to invest (either in one of their packages, or just euiqties as suggested) will I be restrained by the £4,000 limit (the limit you can put into the LISA each year)? So If I have £5,000, would I need to invest the remaining £1,000 separately? What would that involve?

Alexland

Your LISA would be constrained to adding £4k per tax year so if you have more you could either wait until the next tax year starts on 6th April or use a S&S ISA or Pension if you are going to regularly invest more. We add to all 3 types of account each with a different provider.

TheLittleSaver

Alexland said:

Your LISA would be constrained to adding £4k per tax year so if you have more you could either wait until the next tax year starts on 6th April or use a S&S ISA or Pension if you are going to regularly invest more. We add to all 3 types of account each with a different provider.

As I imagined, thank you for the clarification. Considering the current tax year is close to an end, perhaps I would put the first £4,000 now, wait until April to then invest in the rest (to then pour in some more over the year, until I have reached the £4,000 again). Then I would open a S&S ISA as a second point of investment on 2022 if I see I can keep up with saving more than £4,000 a year.

May I ask you what do you use or would you suggest as a "secondary" platform for a S&S ISA?

Of course the question is extended to everyone, thanks!

csgohan4

TheLittleSaver said:

Alexland said:

Your LISA would be constrained to adding £4k per tax year so if you have more you could either wait until the next tax year starts on 6th April or use a S&S ISA or Pension if you are going to regularly invest more. We add to all 3 types of account each with a different provider.

As I imagined, thank you for the clarification. Considering the current tax year is close to an end, perhaps I would put the first £4,000 now, wait until April to then invest in the rest (to then pour in some more over the year, until I have reached the £4,000 again). Then I would open a S&S ISA as a second point of investment on 2022 if I see I can keep up with saving more than £4,000 a year.

May I ask you what do you use or would you suggest as a "secondary" platform for a S&S ISA?

Of course the question is extended to everyone, thanks!

Depends if you want to invest in funds solely or ITs/ETFs/Stock soley or a mix of both. 

Iweb would be a reasonable punt for a cheap platform for S+S ISA, they are increasing their prices soon, so best to apply before that happens.