Is it worthwhile investing £10k?

Type_45

colsten said:

Type_45 said:

What I would personally do:

Open a S&S ISA with Halifax, who you already bank with.

Invest your money in Vanguard Life Strategy 60% Accumulator.

As you bank with Halifax, my understanding is that you will also be able to see your ISA on their app.

Having current and/or savings accounts with Halifax is absolutely no reason why you would choose Halifax as your investment platform. There is also no need to see your investment every time you check your current account.

If a Vanguard Fund is indeed the OP's choice, the most cost-effective platform would be Vanguard. Platform costs are critical, especially if the investment is only £10K.

Vanguard would charge £15 per year for a £10,000 investment.

Halifax charge £36 per year.


An extra £21 per year is not "critical" in any way.  



Tone down the drama and stick to facts.

colsten

Good grief.

Alexland

Type_45 said:

Halifax charge £36 per year.

Halifax SD also charge trade fees where most Vanguard customers would pay none (unless they wanted live ETF trading) so HSD are better suited to people with more than £10k to invest where the fixed charges could be cheaper than percentage charges but for this amount then Vanguard is an ideal place to start.

If the OP is happy to see up to 50% crashes which might take years to recover then the 0.23% Vanguard Global All Cap would be my single fund choice (with their similar 0.22% All World ETF as a second choice) or for a smoother ride then the 0.22% LifeStrategy multi asset fund series.

A cheaper 100% equities option on Vanguard would be to put 90% into their 0.12% VEVE Developed World ETF and 10% into their 0.22% VFEM Emerging Markets ETF then rebalance occasionally using no cost trades. We tend to keep these regions separate for cost efficiency and it might be a good practice to start with even on smaller accounts if they can be bothered.

Alternatively if they did want to pay more to be on the Halifax SD platform (maybe in anticipation that their account valuation will be big enough soon enough to make sense although there are likely to be better options) then at least take advantage of the wider choice to go with a cheaper fund such as the 0.13% HSBC FTSE All World or maybe the various% HSBC Global Strategy multi asset fund series.

Albermarle

For the OP - some background reading maybe useful first .

https://www.moneysavingexpert.com/investments/

https://www.nutmeg.com/nutmegonomics/increasing-your-chances-of-positive-portfolio-returns-the-facts-about-long-term-investing/

Billycock

I would go with-
S&S ISA via the Vanguard Investor website, choose FTSE Global All Cap accumulating index fund and leave for 10+ years, easy and simple to set up. Watch YouTube videos with James Shack for clear, concise information about Vanguard index funds.

steampowered

As you are in your twenties, it is important that you learn how to start making your money work for you. It's a critical life skill that makes an enormous difference to your long term wealth.

Now is the time to start increasing your pension contributions to reasonable levels. You should really be contributing at least 10-15% (including employers' contributions). Especially if either of you are higher rate tax payers.

Spare money should go into a stocks & shares ISA. Do a bit of research to select a sensible platform and a sensible investment fund - lots of information in this thread to help you do that. Stocks & shares have historically returned on average 7.5% per year. 

At your age you should really be investing a bigger portion of the £50k. Won't your salaries cover the "other priorities" you have over the next few years? If so, why leave money in a savings account unnecessarily where it is losing capital each year to inflation, when it could be earning a return.

Blibble

Blimey, thank you everyone. There's a massive amount of advice given in this thread, for which I'm hugely grateful. Rather than firing off 4 or 5 replies separately, I've consolidated some thoughts below, after reading through the monevator.com website (which really does have excellent explanations!) and a look at the offerings on Vanguard.

colsten said:

A word of warning: if your donor dies within 7 years of gifting you the money, some or all of it will still form part of their estate and inheritance tax might become due on it. Make sure you know where you stand. https://www.gov.uk/inheritance-tax/gifts

Thanks for this. The relative in question actually holds a fairly senior role in financial services, so will defer to their judgement here. Worth being aware of though!

Alexland said:.

If the OP is happy to see up to 50% crashes which might take years to recover then the 0.23% Vanguard Global All Cap would be my single fund choice (with their similar 0.22% All World ETF as a second choice) or for a smoother ride then the 0.22% LifeStrategy multi asset fund series.

Can you advise why that would be a risk of up to 50% crash short-term? From my limited reading, products marked as "global" reflect the whole range of the market better and are a lower risk?. All Cap appears to be a safer bet than "small cap" which appears to be riskier. Let me know what I'm missing!

Alexland said:

A cheaper 100% equities option on Vanguard would be to put 90% into their 0.12% VEVE Developed World ETF and 10% into their 0.22% VFEM Emerging Markets ETF then rebalance occasionally using no cost trades. We tend to keep these regions separate for cost efficiency and it might be a good practice to start with even on smaller accounts if they can be bothered.

Is this preferable to having a global / all-world product? If so, what's the benefit - is it just lower fees?

steampowered said:

At your age you should really be investing a bigger portion of the £50k. Won't your salaries cover the "other priorities" you have over the next few years? If so, why leave money in a savings account unnecessarily where it is losing capital each year to inflation, when it could be earning a return.

It's a really good question. We haven't fully allocated the money yet, and evidently still need to think on the allocation before we go live with any particular investment product.

We've been considering an house extension for a while (although we aren't committed to that), and I have a classic car project ongoing too (which was nearly fully paid for before this, but this money would help it cross the line). As O/H is leaving her job at the end of July, I'm obviously keen on having easy access to savings, however, and completely recognise that the above 2 projects are luxuries we may no longer be able to afford in light of her decision. Of course, I'm not asking the forum for guidance on how to allocate the funds; I just wanted to outline some of the context for why we're only considering £10k - £20k tops.


Hopefully I'm asking the right questions - just trying to wrap my head around what products are available! Thanks again.

Polly05

I liked this guys videos. 

https://youtu.be/yG5plUMBtzQ

https://youtu.be/ny5OxhRDGGo

colsten

@Blibble, how will your partner's pension (state and works/private) provisions be kept alive once she stops working? 

bostonerimus

Polly05 said:

I liked this guys videos. 

https://youtu.be/yG5plUMBtzQ

https://youtu.be/ny5OxhRDGGo

It worked for me. It took me 30 years and I had to hold on tightly through the market crashes, but using simple Vanguard funds, I became financially independent in my mid 50s.