Saving in Lifetime ISA & Stocks and Shares ISA

MaxiBoy12

Hi, I am looking to put 4,000 in a LISA this tax year and some more money into a Vanguard Stocks & Shares ISA. My intention is to top up the LISA each tax year with my remaining money that's I intend to have in Stocks & Shares ISA. Can a MSE advisor offer me some help? 

grumiofoundation

People who post don’t (to the best of my knowledge) work for MSE.
Not will they offer advice, instead opinions.

I am not sure exactly what help you are looking for? 

You are allowed to contribute to stocks and shares LISA and stocks and shares ISA in the same tax year (of that was query?).

Without proving more information (e.g. aims, investment timescale, age, pension provision, homeowner/wannabe homeowner, risk tolerance)  no one will be able to comment on whether the products you have chosen are the most suitable for you or what investments you should be considering. 

For example if you are saving for retirement saving extra in your pension may be more suitable, if saving to buy a house in the next few years a cash lifetime ISA is less risky. 

MaxiBoy12

Hi Grumiofoundation, 
I'm a student looking to invest approx £15,000 and I do not expect to purchase property within at least 5 years. I would like to invest in Vanguard Stocks & Shares ISA over the lifetime ISA, as you can't take money out of a LISA without keeping the bonus. I also think I could make more money over the long-term with Vanguard index funds.

MaxiBoy12

With Vanguard index funds you can also take the money out without incurring a charge, which means I still have access to the funds if I needs be (which is also an important consideration).  

MaxiBoy12

My risk tolerance is also low (I don't want to lose the money) to medium (investing in long-term means I can ride out bumps in the market). 

Albermarle

MaxiBoy12 said:

My risk tolerance is also low (I don't want to lose the money) to medium (investing in long-term means I can ride out bumps in the market). 

Nobody want to lose money ! but to make longer term gains on investments , you have to be prepared to see them maybe go down in the shorter term . Often it is not the inherent risk of an investment that is the problem , Some people just can not stomach the volatility of some high equity % investments , such as Index funds .

kuratowski

If this 15k is the only money you have, then you probably do want to take a fairly cautious approach.  Maybe keep the vast bulk of it in cash, and invest a small slice (let's say 3k) and see how you respond at the time of the next market crash.

MaxiBoy12

Thanks for the tips Albermarle, thats why I would put less money % high equity & more money in bonds, so try and offset some of the risk. 
Yes Kuratowski 15k is all the money. I think it may be best for me to split investment into short-term bonds (~ 3-5k), medium term mixed portfolio (equity / bonds ~ 3-5k) & long-term high % equity (for 5-10 years investment, but on a smaller sum of say 1-3k). How I split this portfolio is my current challenge. 
-I think at least 3k in Vanguard LifeStrategy 20% Equity Fund (80% bonds), as this is a very balanced fund made of split composition of bonds / equities. 
-2k in LifeStrategy 60% Equity (40% bonds) 
-3k in short-term bond (like Global Short-Term Bond Index) so I have access when I graduate with masters degree in hypothetical 3 years.   

MaxiBoy12

I could either leave the remaining about 2k in easy access cash ISA or put it into short-term bonds (low risk) so I can access it after 2-3 years. 

kuratowski

It is your money and your choice, but do bear in mind that bonds are also investments, they may fall in value and you might not get all of your money back.

Don't overlook cash - for a short term horizon 2-3 years there is nothing safer and inflation risk is unimportant on these timescales.

MaxiBoy12

I will take this into consideration. It may be a case of putting some in an easy access cash ISA with a near fixed rate. Thanks for your advice