Moving funds from General Investment Account - ISA, SIPP or both?

AuburnEnigma

Hi all,

I haven't made too many posts here, but I've been lurking since August and that's when I started investing. I have a S&S ISA with Interactive Investor (as well as a Trading Account with them - I'm slowly moving things over to the ISA though) ,which is the platform that I hold all of my shares on as I liked the choice and thought the charges were decent. For the same reason, I hold my funds on Fidelity, albeit this is in a General Investment Account.

I'm looking to move these so that they are in a more tax-efficient place as such - I've had a check and most of my funds I can hold in my S&S ISA, however there are some that aren't available and I'm considering the option of a SIPP on Fidelity for these. I suppose my 3 choices are: move whatever I can to the ISA and leave the rest in the general account, move them all to the SIPP so that they're still all on one platform, or move what I can to the ISA and move the rest to a SIPP. I'm leaning towards the last option, but I just wanted other opinions before I make a decision re the SIPP. I don't have much in terms of pension contributions from working (I'm 29 and most of my jobs have been temporary), so a SIPP might be beneficial for me in that respect, but I'm not entirely sure what will work out best so I hope you forumites can offer some pennies of wisdom for me to think about!

Thanks in advance.

dunstonh

Where you invest should be the first thing you decide. Then which platform can facilitate that. If the platform does not offer the investments, then you should eliminate them.   You should not change your investments or strategy because of the platform.

Voyager2002

You need to consider your goals: money in a SIPP will probably be locked up until you are 55, while money in an ISA can be withdrawn at any time. Are you saving for a house deposit, or anything else that you need to pay for before you are 55? If so, it should go into the ISA. OTOH the tax advantages of a SIPP are awesome, meaning that anything you contribute now will be worth many times more once you are 55. So a SIPP might be a good way to save to pay off an interest-only mortgage.

eskbanker

Before focusing too heavily on the tax wrappers and platforms, I'd suggest that it would probably be appropriate to consider what your investment objectives and strategy are, especially when a SIPP is inherently inaccessible until your mid to late fifties?  If, after a few months of investing, you already hold a mishmash of investments across three separate accounts, including some exotic ones that aren't available on a mainstream platform, it may be worth revisiting your approach from first principles....

AuburnEnigma

Voyager2002 said:

You need to consider your goals: money in a SIPP will probably be locked up until you are 55, while money in an ISA can be withdrawn at any time. Are you saving for a house deposit, or anything else that you need to pay for before you are 55? If so, it should go into the ISA. OTOH the tax advantages of a SIPP are awesome, meaning that anything you contribute now will be worth many times more once you are 55. So a SIPP might be a good way to save to pay off an interest-only mortgage.

I own the flat that I live in, and I don't drive or own a car so I don't have any forecast expenses in that respect. I suppose it would only be if I did meet someone and then decide to buy a house with them (as I live alone), then it might change. That's why I'm leaning toward the option of moving whatever I can into the ISA and the remainder into the SIPP, so that I've got something towards retirement whilst I have the majority in the wrapper that I can easily access.

dunstonh said:

Where you invest should be the first thing you decide. Then which platform can facilitate that. If the platform does not offer the investments, then you should eliminate them.   You should not change your investments or strategy because of the platform.

All completely true - I had kept them separate originally so that it was easier for me to keep track of, and a few months ago I changed the plan that I was on with II so now it works out better for me in terms of fees. A few beginner's mistakes on my part which I am now looking to rectify. I only wish I found this site before I started investing rather than after.

Alexland

Have you considered if contributing into a workplace pension might be more efficient (eg more employer matching and/or salary sacrifice to save national insurance) or a S&S Lifetime ISA (same 25% uplift as basic rate relief on a SIPP but no risk of income tax on withdrawal).

AuburnEnigma

eskbanker said:

Before focusing too heavily on the tax wrappers and platforms, I'd suggest that it would probably be appropriate to consider what your investment objectives and strategy are, especially when a SIPP is inherently inaccessible until your mid to late fifties?  If, after a few months of investing, you already hold a mishmash of investments across three separate accounts, including some exotic ones that aren't available on a mainstream platform, it may be worth revisiting your approach from first principles....

I initially thought that I only had the two trading accounts on the platforms, however after a couple of months I discovered that my trading account on II came with a free ISA account - I've been moving my shares from the trading account across since then, but I still have a couple left to bed and ISA, hence why I still have that account.  

As for the funds, the ones I can't have in the II ISA are either Fidelity funds (II do have quite a few of them, they are pretty good in that respect, it's just that I have a couple in my Fidelity account that they don't, one of which is a fund that focuses on China) or ones where they do have other funds from the provider, just not these particular ones that I have. There's not too many that I can't have in the II ISA, but I do know that I can have them in the SIPP.

I have refined my approach over the last few months so I'm just looking for the best way to consolidate things - I've been reviewing my portfolio over the festive period and rebalancing it so this would be the next step for me. It's been a learning curve and there's definitely been some things that were mistakes, but I've learned from them and it's just about getting things in line now. 

Alexland said:

Have you considered if contributing into a workplace pension might be more efficient (eg more employer matching and/or salary sacrifice to save national insurance) or a S&S Lifetime ISA (same 25% uplift as basic rate relief on a SIPP but no risk of income tax on withdrawal).

Workplace pension would be what I would go for normally, however I'm not currently working (so don't have one to pay into at the moment) and as most of the jobs I've had have been temporary (around 6 months) I don't have much in terms of a pension pot. If I was in a stable job where I could have a workplace pension like that, then that would be what I would do. The SIPP is more for if that situation doesn't really change - I know I'm still young enough that it might, but I suppose I'm being cautious in that respect as I'm seeing more temporary jobs around than permanent. 

The lifetime ISA was something that I was looking at, I just wasn't sure whether I could have an S&S LISA alongside my S&S ISA. I do need to do some more reading up on it. It's most likely going to be a couple of months before I start moving any of my funds (as I do want to be employed again first), just thought I'd ask the question now and get some perspectives so that when the time comes I can get this sorted as quickly as possible.

Thank you everyone for the responses so far - I know I've made some right errors, but as I've said above, I've been reviewing everything in my portfolio recently and this was the main question that came out of that review for me.

Alexland

AuburnEnigma said:

The lifetime ISA was something that I was looking at, I just wasn't sure whether I could have an S&S LISA alongside my S&S ISA. I do need to do some more reading up on it. It's most likely going to be a couple of months before I start moving any of my funds (as I do want to be employed again first), just thought I'd ask the question now and get some perspectives so that when the time comes I can get this sorted as quickly as possible.

Yes you can contribute up to £4k pa into a S&S LISA alongside other types of ISAs up to the overall £20k per tax year limit (see below reference) and the cheapest LISA for investing in funds is currently from EQi (Equiniti). Yes read the terms carefully as it's not a simple product but can be very good in the right circumstances.

https://www.gov.uk/individual-savings-accounts

"There are 4 types of ISA:

• cash ISAs
• stocks and shares ISAs
• innovative finance ISAs
• Lifetime ISAs

You can put money into one of each kind of ISA each tax year."