Invest before or after 5th April?

whatstheplan

If you've read or glanced over my other topics, you'll know I'm 49 and looking to start my investment journey asap.  I already have a work place pension and I'm exploring paying more into this.  My goal is to retire asap (aiming for 58-60 years old, 61-62 worst case scenario.)  That aside, at present I have circa £30k to invest over and above anything I'll do with my pension.  Sometimes in life people say 'at some point you have to go for it, otherwise you'll always find reasons to put it off.'  With this in mind and to ensure my money starts working for me asap, I'm thinking to go with Option A.  However, given I'm new to all this, perhaps Option B is the more logical approach?  Bear in mind I'm already heavily leaning towards passive investment options. 

Option A
Put £15k into a stocks & shares ISA before 5th April.  Possibly Vanguard LifeStrategy 100% Equity.  Post 5th April, take a few months to further explore the market and educate myself.  Then, during 21/22, invest the remaining £15k into whatever I think suits my strategy best.

Option B
Invest nothing before 5th April.  Continue to further explore the market and educate myself.  Then, during 21/22, invest the £30k into whatever I think suits my strategy best.  Obviously limited to £20k if I elect to go with stocks and shares ISA.

Although longer term it might make little difference, my rationale with Option A is to put the entire £30k to work this calendar year.  However if I wait to 6th April and want to only invest in a stocks and shares ISA, I'll be limited to investing £20k 21/22 and then £10k 22/23, so there's a delay to the start of my journey.

Thoughts please.

Dazed_and_C0nfused

You can add £20k pre 6 April and invest it later if you want.

https://www.barclays.co.uk/smart-investor/accounts/investment-isa/five-isa-myths-exposed/

Alistair31

Yeah, put it in and leave as cash until you are certain on investment choice. 

jimjames

Seems better to get the money into an ISA before 5 April so the allowance is allocated and you then have another £20k available for post April. If you dont know which platform yet then just put it in cash ISA and can transfer later

jimjames

Dazed_and_C0nfused said:

You can add £20k pre 6 April and invest it later if you want.

https://www.barclays.co.uk/smart-investor/accounts/investment-isa/five-isa-myths-exposed/

Just a shame they cause more confusion with their ISA "myths" stating that you can take money out and pay it back in without affecting allowance. They do mention later that it needs the ISA to be flexible but I don't think many S&S ISAs are.

Albermarle

As above , but then do not wait 12 months before investing any of it, because you can't make your mind up and/or you think markets will drop soon. 

Alistair31

jimjames said:

Dazed_and_C0nfused said:

You can add £20k pre 6 April and invest it later if you want.

https://www.barclays.co.uk/smart-investor/accounts/investment-isa/five-isa-myths-exposed/

Just a shame they cause more confusion with their ISA "myths" stating that you can take money out and pay it back in without affecting allowance. They do mention later that it needs the ISA to be flexible but I don't think many S&S ISAs are.

Vanguard is. 

whatstheplan

Thanks for the replies.  Can I do this?

1. Put up to £20k into a cash ISA by 5th April (this tax year.)
2. Transfer that £20k into a stocks and shares from 6th April  (next tax year.)
3. Invest up to £20k of additional money into the stocks and shares ISA next tax year?

So purely as an example can I do this?

30/03/2021: Put £20k into cash ISA.
08/04/2021: Transfer that £20k into a stocks and shares ISA.
08/08/2021: Invest additional £20k into the stocks and shares ISA (i.e. £40k in total but £20k is transferred from the previous tax year.)

Assumes the ISAs are flexible.

dunstonh

Option A
Put £15k into a stocks & shares ISA before 5th April.  Possibly Vanguard LifeStrategy 100% Equity.  Post 5th April, take a few months to further explore the market and educate myself.  Then, during 21/22, invest the remaining £15k into whatever I think suits my strategy best.

It is the weakest of the VLS range but if its what you want then fair enough.    However, it seems you are not sure what you want.  So, going with option C would be better.

Option C

Use your remaining 20/21 ISA allowance with a whole of market platform (so you are not wedded to one fund house) but keep it in cash until you decide.   But be snappy about it as there is little point in overthinking which global equity fund you want.

Albermarle

whatstheplan said:

Thanks for the replies.  Can I do this?

1. Put up to £20k into a cash ISA by 5th April (this tax year.)
2. Transfer that £20k into a stocks and shares from 6th April  (next tax year.)
3. Invest up to £20k of additional money into the stocks and shares ISA next tax year?

So purely as an example can I do this?

30/03/2021: Put £20k into cash ISA.
08/04/2021: Transfer that £20k into a stocks and shares ISA.
08/08/2021: Invest additional £20k into the stocks and shares ISA (i.e. £40k in total but £20k is transferred from the previous tax year.)

Assumes the ISAs are flexible.

Why not just do what was suggested and open a new S&S ISA today with £20K cash and then add another £20K to it sometime after 6th April . You can then invest the money  at your leisure .
Removes one unnecessary step from your plan. 

YellowStarling

With Easter weekend coming up, the last business day of 2020/21 is this Thursday.  It might be worth checking on what the lead times are on opening a new account and funding it with this year's allowance are before doing so, otherwise maybe funding an existing ISA with the allowance and then transferring next year to a S&S ISA once you're comfortable might be better for you.

However, if you have time (i.e. no elongated ID checks, etc.) then I agree with the advice to just open a S&S ISA now and fund it with the cash from 2020/21's allowance and then wait until you're ready to invest that cash (and/or have added to it using 2021/22's allowance).  Cash can sit in a S&S ISA, much like a cash ISA, it's just most providers won't offer you interest to do so.  I don't think many (if any) charge you to hold cash in a S&S ISA either, but might be something to check in the T&Cs too.