I'd like to "start over" with my ISA and Pension

DoctorStrange

Long story short,  my ISA (£100k) and pension (£250k) need a little TLC as I've been neglecting them.

Let's assume I've liquidated all positions and want to reinvest the cash today. 

The ISA time frame is probably 5 years and target would be c3% above inflation if possible, and happy to be challenged on that. 


Pension is 20 years away so happy to take more risk,  to maybe achieve 5% after inflation? Again happy to be challenged on the targets. 

I know no one can give "advice" and I'll DMOR etc but you folks are so knowledgeable is a great place to start 😀

TIA

george4064

If your 5yr time frame for the ISA is set in stone you should not be investing that cash at all, transfer it to a Cash ISA.

Albermarle

The general idea of taking more risk for the longer term pension is sound.
Your targets would probably have been easily achievable over the last decade, but general consensus seems to be the next decade will not be so lucrative.
Five years is rather a short investment period for the ISA. Minimum ten is recommended , although going from five to seven reduces risk significantly using historical statistics.

dunstonh

The ISA time frame is probably 5 years and target would be c3% above inflation if possible, and happy to be challenged on that. 

As you intend to spend all the money in 5 years time, you should be looking to hold the bulk of that in cash.  You can possibly get away with having a very small amount invested but it would depend on your risk profile.

As you are only investing for half or less of an economic cycle, you are taking a higher risk due to lack of time.  You may get the bad half of the economic cycle or the good half.  You wont know in advance which.

DoctorStrange

Thanks - just to clarify the 5 years for the ISA isn't set in stone and I have both emergency cash and a "Plan B" should conditions be unfavourable at the time.

I'd be able to leave the ISA alone for another 5 years if I had to, but all other things being equal I'd prefer access around the 5 year mark. 

I'd rather avoid cash given the inflation risk. 

dunstonh

DoctorStrange said:

Thanks - just to clarify the 5 years for the ISA isn't set in stone and I have both emergency cash and a "Plan B" should conditions be unfavourable at the time.

I'd be able to leave the ISA alone for another 5 years if I had to, but all other things being equal I'd prefer access around the 5 year mark. 

I'd rather avoid cash given the inflation risk. 

So, is there actually a possible need in 5 years or not?
You say it's not set in stone and could leave it for another 5 years (bringing us to 10).  So, does that mean you have a purchase in mind that WILL happen between 5-10 years?
Modern investing doesn't have timescales attached to it.   It is open ended.     You are not taking out a 5 year plan.   You would be taking out an investment that remains in place until you say otherwise.    Timescale only comes into it when assessing risk and the types of assets you should be investing in.

Aceace

Your ISA cash and time frame is well suited to being split over multiple IFISAs. You'll need to do plenty of research to avoid the dodgy platforms. 4thway would be one place to start your research. 

DoctorStrange

dunstonh said:

DoctorStrange said:

Thanks - just to clarify the 5 years for the ISA isn't set in stone and I have both emergency cash and a "Plan B" should conditions be unfavourable at the time.

I'd be able to leave the ISA alone for another 5 years if I had to, but all other things being equal I'd prefer access around the 5 year mark. 

I'd rather avoid cash given the inflation risk. 

So, is there actually a possible need in 5 years or not?
You say it's not set in stone and could leave it for another 5 years (bringing us to 10).  So, does that mean you have a purchase in mind that WILL happen between 5-10 years?
Modern investing doesn't have timescales attached to it.   It is open ended.     You are not taking out a 5 year plan.   You would be taking out an investment that remains in place until you say otherwise.    Timescale only comes into it when assessing risk and the types of assets you should be investing in.

There's no big purchase planned and what I'm trying to say is that it'd be invested for 5 years minimum, and then disinvested after that when I'm happy the timing is right e.g. if its achieved it's target and everything else in my life is rosy I might treat myself to something or start spending on unnecessary luxuries rather than saving.

If conditions are unfavourable e.g. if my pension seems underfunded or is underperforming, or my cash savings aren't sufficient or I've had an unexpected bill, then I'll leave it invested for longer, and continue saving, limiting luxuries etc.

I think counts as open ended?