cash LISA + fund investment for retirement?

Mosler

Alexland said:

Mosler said:

If someone is over 40, they can't transfer previous year's from a cash LISA to S&S LISA, or is each provider different?

The rules allow LISA transfers after 40 but there are currently no S&S LISA providers accepting such transfer requests. The market is small.
I just looked up the investment returns on the HSBC FTSE All World fund since LISAs launched 3.75 years ago and it's over 40% but of course the money hasn't all been invested since the start but gradually added each tax year so won't have done as well.

On the EQi LISA application form it states:
"I am 18 years of age or over, and either under the age of 40 or the account is being opened to receive a transfer of subscriptions/assets from another Lifetime ISA."
Wouldn't that allow a transfer in if aged over 40?

Alexland

Mosler said:

On the EQi LISA application form it states:
"I am 18 years of age or over, and either under the age of 40 or the account is being opened to receive a transfer of subscriptions/assets from another Lifetime ISA."
Wouldn't that allow a transfer in if aged over 40?

Good spot, maybe something has changed. We recently had a forum member over 40 who had made the mistake of using a Cash LISA for saving up for retirement and EQi told them they couldn't accept him.

Mosler

Is it always best to spread the ISA allowance over the 12 months when paying into a S&S account? I haven't used this year's LISA allowance yet, I'd have to pay in 4k over 3 months. Plus I've got the last 3 years in a cash LISA too.

Alexland

Mosler said:

Is it always best to spread the ISA allowance over the 12 months when paying into a S&S account?

I prefer to fill our S&S LISAs in the first few months of the tax year and then move onto using as much S&S ISA allowance as possible for the remaining months. Tends to be more efficient on any transaction costs and means the LISA bonus is invested earlier to start growing.

Mosler

Is the EQi LISA a managed type or self-managed where you need knowledge of funds and shares?
Thanks

Alexland

Mosler said:

Is the EQi LISA a managed type or self-managed where you need knowledge of funds and shares?

You need to pick your own investments balancing volatility with the potential for long term return. But there are all in one funds that make this easier.
So for example if you are OK for your investment to crash around 50% you might pick HSBC FTSE All World fund. Or if you only want it to crash around 40% you might pick Vanguard Lifestrategy 80 or if you only want it to crash around 25% you might pick Vanguard Lifestrategy 60 accepting it might not grow much beyond inflation as it has 40% bond weighting. Some crashes are bigger than others but if the fund is well diversified it should eventually recover (and is a good opportunity to buy more lower cost units with your next contribution).

TheLittleSaver

Albermarle said:

Best normally to avoid the suggested packaged investment suggestions from any provider as they tend to have high charges .
Difficult to say what a good level of pricing is , as it depends, However max 1% platform + fund charges is a good guideline .
A typical charge for a multi asset fund on a platform would be 0.5% all in , but can be less.

Looking at one of the grouwth focused packages in AjBell (the "global growth" one, which is 98% shares in UK, North America, Japan, etc...) it says the OCF is 0.35% + an annual custody charge of 0.25%. Would that be good?

By the way, just to be clear, in case I choose my funds/shares myself, I would not be charged that 0.35%, but only the annual custody of 0.25%? Is that the reason why doing it yourself is cheaper? Genuinely asking.

And I don't seem to find the HSBC all world tracker/fund that has ben mentioned before in this discussion, perhaps the exact name is different or I'm doing something wrong in the Aj Bell website?

Also, how does it work when I add more money overtime? For example, I open my LISA account to start invest with my first £4000, then I add £4,000 more the next tax year in the same account. Would that money go automatically to be invested in the package/funds I have chosen the first year? Or do I need to do it manually every time I add money? If so, does it come with a cost every single time?

Alexland

Here is the AJB link to the HSBC fund,
https://www.youinvest.co.uk/market-research/FUND:BMJJJF9
Each time you add money to AJB you would do a manual trade for £1.50 to buy fund units (leaving some cash to pay ongoing 0.25% account fee until you can next contribute with a bit of headroom for growth) and when the associated bonus is added that's another £1.50 to invest it unless you wait until you next have money to add to combine the trade. You can also setup a monthly tradeplan but that's also £1.50 each time.
EQi don't charge for fund buying trades, have a lower percentage ongoing fee and cap it at £10/qtr on funds...

csgohan4

Alexland said:

Here is the AJB link to the HSBC fund,
https://www.youinvest.co.uk/market-research/FUND:BMJJJF9
Each time you add money to AJB you would do a manual trade for £1.50 to buy fund units (leaving some cash to pay ongoing 0.25% account fee until you can next contribute with a bit of headroom for growth) and when the associated bonus is added that's another £1.50 to invest it unless you wait until you next have money to add to combine the trade. You can also setup a monthly tradeplan but that's also £1.50 each time.
EQi don't charge for fund buying trades, have a lower percentage ongoing fee and cap it at £10/qtr on funds...

My worry , they will change their charges once they have enough customers. AJ Bell has recently changed their charges already and so have Iweb to an extent

TheLittleSaver

Alexland said:

Here is the AJB link to the HSBC fund,
https://www.youinvest.co.uk/market-research/FUND:BMJJJF9
Each time you add money to AJB you would do a manual trade for £1.50 to buy fund units (leaving some cash to pay ongoing 0.25% account fee until you can next contribute with a bit of headroom for growth) and when the associated bonus is added that's another £1.50 to invest it unless you wait until you next have money to add to combine the trade. You can also setup a monthly tradeplan but that's also £1.50 each time.
EQi don't charge for fund buying trades, have a lower percentage ongoing fee and cap it at £10/qtr on funds...

Thank you very much for the link Alexland, much appreciated.

I see, so would you suggest to open a S&S LISA with AJ Bell AND a S&S ISA with EQi?

So, basically I would use AJ Bell for one of their packages (plus the HSBC World fund which I would add by my self) and then open a S&S ISA with EQi to do some DIY investment. Or perhaps would be better to have both LISA and ISA with EQi?

Although I am thinking that, having the money split in two platform, would give me more protection? But that's just thinking out loud, as I'm still a newbie on the matter.