Stocks and Shares ISA - my best bet?

Buritonian

I'm torn between Stocks and Shares ISA's and investing in property, or both. My wife and I have a £40k lump sum and combined, we can also afford to invest £700 per month too. Existing investments are just my workplace pension, which I'm currently over paying £500 into too, which will continue, which should cover us ok during retirement (age 67). The hope is that these further investments we now want to commit too (at age 50) will result in what we're calling our "happily ever after" money which might afford us a move to a cottage, or a get us a holiday home overseas, or perhaps it'll just cover our backsides, in case we aren't able to maintain this level of investment, right up to 67. Is it glaringly obvious how we should proceed? 

eskbanker

More overpaying into pensions, up to your annual contribution limits, is likely to be most beneficial, whereas buying into a second property is less attractive as an investment than before, given changes to the taxation regime.

In between these options, S&S ISAs are typically favoured by most on here in your situation, although your reference to "might afford us a move to a cottage" could be interpreted as suggesting that moving to a better home now might be appropriate?

Albermarle

£40K normally would not be enough to start getting involved in property/BTL . In any case unless you are an experienced landlord and/or a builder/tradesman , it is not as easy or profitable as is often made out .

Normally it is said first you need an emergency cash fund of easy access savings . Probably minimum £10K , ideally more.
Then maximising pension contributions ( due to the tax relief ) for retirement income.
If your wife is a non earner , she can still contribute £2880 pa to a pension and £720 tax relief  will be added
Then S&S ISA if you want access to the money earlier, but the investment timeframe should ideally be less than ten years . 
So at age 50 , it would make more sense to contribute to pensions than S&S ISA's

You should make sure you are aware of how your pension is invested , as it may benefit from some switching around.

jimjames

j.p said:

Or just earn a target 8% a year by lending on CrowdProperty:

https://www.crowdproperty.com/

That has this warning: Your capital is at risk. No FSCS protection.

Obviously a S&S ISA has capital at risk but you have FSCS protection unlike this investment.