First time investor - is £800 per month too much?

kuratowski

Sometimes the amount is relevant, as you can run up against various limits (ISA allowance, annual allowance, personal savings "allowance", etc).  So on the whole, I think it is best to include figures in threads on this forum, in spite of the risk of being accused of bragging!

McBainUK

MaxiRobriguez said:

Yeah I was assuming you had a long term investing horizon.

If you're using this money to save for a house then a S+S ISA may not be appropriate given probable volatility. Usual advice given is investments need to be left in situ for 5 years, if not 10, to ride that volatility out.

It may be worth considering first maximising a Cash LISA? You get a 25% bump from the government every year, which will likely beat investment return from a S+S ISA. You'd still have some cash left over which you could pump into a S+S ISA if you were content with the prospect of potentially coming out with a lower figure than you put in when it comes to the point you want to buy your house.

Thanks for raising this again as it's highlighted a flaw in my thinking.  I was not considering 10yrs from each monthly deposit, only from the first one! I will go back to the start and consider what we want from these savings.

McBainUK

Deleted_User said:

You mentioned a house move - does that imply you already own a house/flat? A cash LISA is only useful for buying your first house/flat. If you already own one, then a LISA is only useful for retirement. And in your situation (access to a salary sacrifice pension, and approaching higher rate tax), a standard pension is better than a LISA for retirement.

While a pension is better for retirement, and cash savings accounts or premium bonds are better for money expect to use in the near term, I think there can be a place for S&S ISA as something intermediate, for money you're not quite sure when you'll want to use. Most people's (financial) lives are not totally predictable.

Yes you are correct I own a house already.

It's true that when trying to plan this stuff it's trying to predict your future self and circumstance. What term do you consider as "intermediate"?

Albermarle

in this context 'intermediate' means money you might want before you reach the age when you can take money from your pension , but normal investing 'rules' mean that for anything you might need in say 7 years  , you should keep in cash ( although the exact time is subject to opinion )
So the intermediate period is between the two. 

Eco_Miser

McBainUK said:

Reading the info on here regarding S&S ISAs, all the guides and forum posts seem to only discuss <£50 per month investments.

I plan to invest £800 per month and the substancial difference is causing a little concern for me...

• Is this a bad thing to do?
• Does the savings advice change if the amounts invested this much more than the guides/examples?

There are all sorts of limits to tax-advantaged investing which <£50 per month investing won't reach. Have a read of http://monevator.com/ and some of the comment threads there for all sorts of obscure tips and tricks - and read some of the linked blogs to see what the ridiculously wealthy are doing to ensure a long (starting early) and comfortable retirement.