Vanguard?

barryd999

Just exploring my options for investing the few quid I dont have tied up in Pension pots etc.  At the moment its just cash sat in savings accounts and the interest rates are so low now it might even be better putting the money into Premium bonds (might be more fun). 

I keep seeing Vanguard mentioned on here and have just been reading up on them.  Sounds pretty good and easy and you can invest with them direct I believe now at a pretty low management fee rate.   I no longer have a Stocks and Share ISA. I Recently cashed in my last one with L&G (Reassure) so would I be better dropping say £40k into one of their Life Strategy ISA accounts, maybe the 40%/60% Equity / Bonds (Im moderately risk averse) and seeing how that goes?  I understand from an article I read that although they claim to be investing in emerging global markets, 25% of their shares are UK based companies.  So with that in mind I was  wondering with the news today that the UK economy is set to grow much faster than expected if this would be a good choice right now. 

Do you have to pay into these things each month or can I just lob in chunks when I feel like it?  Im semi retired now and have been for a fair few years so I have a fluctuating income really.  I am 55.

eskbanker

Quite a lot to unpack there - in terms of the practicalities, if you literally withdrew from previous S&S ISAs then you're now constrained by the annual contribution allowance of £20K so couldn't pay in £40K in one go.  There's no obligation to make regular contributions or investments.

However, the fundamental issue is whether or not investment is suitable for your objectives, i.e. when will you anticipate needing access to the money?

As you say, Vanguard's LifeStrategy range has more of a UK focus than its peers, although many UK-listed companies derive substantial proportions of their profits and revenues from elsewhere.  Whether or not a UK focus is a good thing is up for debate, so you also have the option of other global multi-asset funds with a more 'natural' weighting of about 5%, or you could invest more heavily in the UK via dedicated funds if you're convinced that's appropriate.

In general, it makes sense to identify what you want to invest in before deciding on platforms, so probably best not to orient your thinking too heavily towards Vanguard without weighing up alternatives....

Albermarle

o would I be better dropping say £40k into one of their Life Strategy ISA accounts

An ISA is a tax wrapper that you can hold investments in . Vanguard Life Strategy is a type of investment.

The maximum you can invest in an ISA in a tax year is £20K

Best to keep the two things apart when thinking about investing . Even where in this case Vanguard offer an ISA that you can keep Vanguard investments in, the two things are actually separate . 

Life Strategy is just a low cost multi asset fund , of which there are alternatives .https://monevator.com/passive-fund-of-funds-the-rivals/

So with that in mind I was  wondering with the news today that the UK economy is set to grow much faster than expected if this would be a good choice right now. 

The performance of the UK economy and the performance of the FTSE 100, are only loosely linked as most of the companies in that index make most of their money abroad . In fact if a booming economy makes the Pound strengthen , this can have a negative effect .

Do you have to pay into these things each month or can I just lob in chunks when I feel like it? 

Most ISA's are pretty flexible on this point 

Thrugelmir

Premium bonds maybe a viable option until you've had time to think matters through fully.  Investing is these days almost too good and easy to be true. A reason to bide ones time and not get sucked into the herd mentality.  Very easy to lose money on stock markets when there's a correction. 

barryd999

Thanks.  As you can probably tell I dont know much about investments. Really I was just looking for something that might make a bit more than the banks are currently offering.  My general feeling after Brexit was the UK might not have been the best place to hold shares but with my simple outlook I wondered if maybe short term at least with todays news that it might be.  I have just seen Vanguard come up a few times on here though when searching and looking at their website it looked reasonably straight forward to understand.  My wife has savings also, considerably more than I have (in cash at least) but she is adamant she is leaving it in a bank.   It would be nice if we could supplement some income off it really thats all. 

Albermarle

Thanks.  As you can probably tell I dont know much about investments.
In which case maybe better to do some background reading/research before starting . It does not have to be too detailed or 'heavy'
Really I was just looking for something that might make a bit more than the banks are currently offering. 
Like all of us , but anything that pays more than the bank brings with it a level of risk . That is not a bad thing , as risk means reward.
My general feeling after Brexit was the UK might not have been the best place to hold shares but with my simple outlook I wondered if maybe short term at least with todays news that it might be. 
As an investor it is better to ignore the current news or try and second guess the effect on markets . Next week /month/year there will be more news .
 I have just seen Vanguard come up a few times on here though when searching and looking at their website it looked reasonably straight forward to understand.
It is but the main point is that you are comfortable with the investment, level of risk etc whether it is Vanguard or one of their many competitors.

thickasabrick

barryd999 said:

Just exploring my options for investing the few quid I dont have tied up in Pension pots etc.  At the moment its just cash sat in savings accounts and the interest rates are so low now it might even be better putting the money into Premium bonds (might be more fun). 

I keep seeing Vanguard mentioned on here and have just been reading up on them.  Sounds pretty good and easy and you can invest with them direct I believe now at a pretty low management fee rate.   I no longer have a Stocks and Share ISA. I Recently cashed in my last one with L&G (Reassure) so would I be better dropping say £40k into one of their Life Strategy ISA accounts, maybe the 40%/60% Equity / Bonds (Im moderately risk averse) and seeing how that goes?  I understand from an article I read that although they claim to be investing in emerging global markets, 25% of their shares are UK based companies.  So with that in mind I was  wondering with the news today that the UK economy is set to grow much faster than expected if this would be a good choice right now. 

Do you have to pay into these things each month or can I just lob in chunks when I feel like it?  Im semi retired now and have been for a fair few years so I have a fluctuating income really.  I am 55.

As mentioned by the previous posters keep the Stock & Shares ISA concept separate from actual investments, it is a tax wrapper.
To introduce my children to the concept of investing I did the following.

1. Open a Stocks & Shares ISA to hold the investments
There are a variety of platforms you can use for this , Monevator have an article "Compare the UK’s cheapest online brokers"
You can also use a normal trading account but then you would have additional work keeping track of income and capital gains tax for HMRC.

2. Select a low cost world equity tracker
For this exercise I pointed them at the Simplicity portfolio concept as explained by a number of bloggers such as Lars Kroijer , The Escape Artist , JL Collins and many others including Monevator.

3. Purchase units of the chosen investment
We started with the minimum monthly £ 100, although you can put lump sums in up to the £20,000 limit each tax year. 
First year went for FTSE All-World High Dividend Yield UCITS ETF (VHYL) as I wanted to introduce the concept of seeing dividends appearing in the portfolio. Revisited after the first year and switched to FTSE All-World UCITS ETF (VWRL).
There are other low cost trackers which might suit your profile better and Monevator have an article for that too  "Fund-of-funds: the rivals"

One final reminder, investing like this works best with a minimum timeframe of 5 years,  longer timeframe the better.
It can be a shock to the system to purchase some units and check on it six months later to find it's value has dropped.
You need to understand your risk profile and when you are likely to need the cash locked into the investments.