Transfer S&S ISA or Not

Stegor

Hi everyone,

Myself and my wife currently hold Homemaker ISA's with Synergy Financial Products Ltd. These were originally taken out to pay off an interest only mortgage and are due to mature in 2030 with hopefully a combined £80k. We have been overpaying the mortgage and hope to have it paid off in the next few years so the ISA's will be used as part of our retirement fund. There is life cover of £78k on the policies which I would like to reduce to zero but the minimum is £10k. The values are currently £21k for me and £24k for my wife. The charges are Policy Fee: £2.10 monthly, Annual Fee: 0.72%, IFA Fund Renewal Fee: 0.5% annually and a Dealing Charge: 4.5%. My question is are we better to leave these policies running and reduce the Life Cover to the minimum amount or are there better ISA's out there for investing for retirement. We are hoping to retire in the next 3 to 5 years, possibly continuing to work part time for me.

Thanks.

masonic

There are far cheaper S&S ISAs out there (without the life cover), however that assumes you would choose your own investments. If you would want to do it under advice, then you might be able to shave a little off the costs, but you are unlikely to get much below 1% pa once all elements are taken into account.

If you are planning to retire at a normal retirement age, then it might be worth using some of it to fund a pension (whether that's paying in using the money, or living off the money while you increase deductions from salary).

Albermarle

FYI , a typical charge for a S&S ISA would be 0.25% and then investment charge on top . Could be anything from 0.1% to 2% .
Ideally should aim for a total cost < 0.5% .
No LIfe cover
No financial advice
DIY online ( easier than it sounds, if you have some basic knowledge, as some relatively simple/user friendly products available nowadays)

Same for a pension.

Stegor

Thanks for the comments, I've been looking at online DIY S&S Isa's, there's a lot out there!! Any advice on which platforms to concentrate on? Thanks

eskbanker

Stegor said:

Thanks for the comments, I've been looking at online DIY S&S Isa's, there's a lot out there!! Any advice on which platforms to concentrate on? Thanks

Depends on what criteria you'd be using to differentiate them, but https://monevator.com/compare-uk-cheapest-online-brokers/ has a table summarising charges, along with some limited narrative about which are best for which portfolios.

Albermarle

Stocks & shares ISAs: find the best platform - MSE (moneysavingexpert.com)
Best stocks & shares Isas: Pick the right DIY investment platform | This is Money

Just remember the platform you choose is less important than the investments you choose to hold in the ISA.