Vanguard S&S ISA any good?

kenzie123

Hello
Hoping to get some advice about the best next step for my savings.

I currently have a LISA open, and my aim was to try and get £4k a year in there.
Separate to this, I have £10k sat in a normal ISA which is not doing anything currently - so want to move £5k of it into an S&S ISA and £4k into the LISA for this year's allowance - then keep £1k aside for emergencies.

Is this the best way to go?

I believe the S&S ISA is the best way to get any kind of interest but I also don't think I understand them enough, plus do I stand to lose all of my money if things were to go wrong?
Hoping to keep it open fairly long term - I do need access to some money as I'm saving for a mortgage, but was hoping to start that from scratch once my savings are in place.

Would love to hear any experiences with the Vanguard S&S ISA - I only mentioned that one as a friend has it, otherwise I'm sure there are other options.

Thanks 

TheMilkmansDad

S&S ISA in an investment and should be put away for 7-10 years minimum, in which time the money should at least hold its own against inflation.

You say you're looking to for a mortgage - assuming this is in the next 7 years I wouldn't be looking at investing. I'd look into savings account/premium bonds for now.

As to Vanguard S&S ISA, I have one myself and have no complaints, easy to use and comparatively cheap.

kenzie123

TheMilkmansDad said:

S&S ISA in an investment and should be put away for 7-10 years minimum, in which time the money should at least hold its own against inflation.

You say you're looking to for a mortgage - assuming this is in the next 7 years I wouldn't be looking at investing. I'd look into savings account/premium bonds for now.

As to Vanguard S&S ISA, I have one myself and have no complaints, easy to use and comparatively cheap.

Thank you so much for your reply - is there a savings account you'd recommend?

TheMilkmansDad

I would never recommend any. I would, however, direct you to main website which goes through best accounts at present:
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Audaxer

kenzie123 said:

I believe the S&S ISA is the best way to get any kind of interest but I also don't think I understand them enough, plus do I stand to lose all of my money if things were to go wrong?
Hoping to keep it open fairly long term - I do need access to some money as I'm saving for a mortgage, but was hoping to start that from scratch once my savings are in place.

An S&S ISA is just the tax wrapper that holds the investments you put into it. If you open a Vanguard S&S ISA you can only put Vanguard funds into it, but like all investments they are not guaranteed to increase in value but should make gains if held for the long term. I would say 7-10 years is medium term, so I wouldn't invest £4k if I needed access to all the money in that timeframe.

If you do invest there are various risk levels and you should only invest at a risk level you are confident with. If for example you invested in 100% equity fund, that is high risk as the value could drop over 40% in an equity crash. You can get multi asset funds with different risk levels. A medium risk would be a 60% equity / 40% bond multi asset fund which is likely to lose a lot less in an equity crash. You need to select a risk level at which you would not panic and sell at an equity crash, as that is the worse course of action you could take.

I would say only invest funds that you can put away for the long term - not funds you may need in the medium term for a mortgage. If you do decide to invest, before you start I would recommend doing some reading on the Monevator site to understand more about investing, including multi asset funds, risk levels etc.

Albermarle

What is the LISA going to be used for ?
If it is for the long term/retirement it should be a S&S LISA 

george4064

Is the LISA that you currently have open, a Cash LISA or a Stocks & Shares LISA?

Generally speaking, Stocks & Shares should only be for money you can leave untouched for long-term which is usually at least 5 years but preferable 10 years +. As well as your horizons of your objectives, your tolerance to risk will also determine whether investments are suitable for you or not.

jimjames

kenzie123 said:

Separate to this, I have £10k sat in a normal ISA which is not doing anything currently - so want to move £5k of it into an S&S ISA and £4k into the LISA for this year's allowance - then keep £1k aside for emergencies.

Is this the best way to go?

If you think £1k is enough for emergencies then yes but it does seem quite low.

kenzie123 said:

I believe the S&S ISA is the best way to get any kind of interest but I also don't think I understand them enough, plus do I stand to lose all of my money if things were to go wrong?

Would love to hear any experiences with the Vanguard S&S ISA - I only mentioned that one as a friend has it, otherwise I'm sure there are other options.

You generally don't get interest with a S&S ISA, you can do if you invest in bonds but that's not a common option to use exclusively. If you invest via Vanguard then you will be putting your money into one or more funds that invest in many companies. As such you will not be in the situation of losing ALL of your money but it could drop 40-50% in a market correction. (technically it could drop to zero but if that happened every company in the world would be gone and money in an ISA would be the least of your worries)

I use Vanguard and find them pretty easy to use. They're one of the largest investment companies worldwide so a pretty good option.

TheMilkmansDad said:

I would never recommend any. I would, however, direct you to main website which goes through best accounts at present:
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

There are also options that pay more interest than savings accounts depending on the amount you want to save and don't appear on "best" savings account lists as they're not a savings account. If you want to make a bit more effort than plonking everything in one place then look at current accounts paying interest like Lloyds/BOS/Virgin.