How much can I afford to invest?

Albermarle

MQA said:

Roger175  - well done with selling your BTL,(I am having issues) but will focus on my savings

Appreciate helpful informaiton - how do you select the SIPP platform ? is there a comparison site or do the comparison manaully? ie compile a list and then go on to their webiste?

Which platform you use for your pension/ISA/other investments is a secondary issue.

£200K is a lot of money just to come on an internet forum asking questions, especially as details about your self, your objectives etc are rather sketchy. For instance you do not mention your age or whether you are employed.

Have you thought about getting professional advice?

MQA

My ex IFA had selected my SS ISA and penison, and some posts from this Forum have mentioned that I can get better fees elsewhere and can try DIY, Also, I have tried to find an excellent IFA it is not impossoble and not easy either.

My income is from my rental property and I am not working, my objectives is to get some growth from investments (my aim is NOT to take any income, ie will select accumulation-units) to help / make up my small pension and I am looking to stop the investment in .12 - 13 years as not sure I'd carry on managing the investments.

I do not have to invest all the money in one go, I can drip feed but would like to start soon if  I am able to select the funds etc  in terms of selecting funds and platforms etc what would be a good way to start ?

also, I think I should use the £200K to start and then review my SSISA and pension or the other way around?

masonic

If the money has been invested in IFA selected funds then there is no reason to sell and then drip feed back into new funds, just make the switch. For the additional money, statistically you'd be better off investing it all (with a suitable cash buffer). It is just as likely a crash will come along just after you finish drip-feeding as at the start.

That just leaves you with the question of what to invest in...

Roger175

MQA said:

Roger175  - well done with selling your BTL,(I am having issues) but will focus on my savings

Appreciate helpful informaiton - how do you select the SIPP platform ? is there a comparison site or do the comparison manaully? ie compile a list and then go on to their webiste?

MQA, the two I use are AJ Bell and Hargreaves Lansdown, both of which I've used for some time. There was never a long selection process, it was just a case of clocking what others were using when reading posts on investment forums. I opened HL about 25 years ago to supplement my then work pension and then a few years later I decided to transfer an old work pension and opened the AJB account. At the time I was thinking I needed at least two, to spread the risk, but I have now come to realise this is not necessary.  The fee structures with both have changed over the years and I have re-evaluated things recently and have decided to transfer the HL pension to the AJB one. This is largely due to AJB being cheaper for holding funds - I used to hold far more individual shares but am gradually going over to funds and I am paying more than necessary with HL.

Roger175

MQA, from what you say above, you are facing some of the same issues we were/are. If you are not employed, you have little scope to put any meaningful amount into a pension (the rental income doesn't help). You also only have scope to put £20k per person per annum into S&S ISAs. This why we've put a lot into cash deposits, although general investment accounts are available albeit, no tax relief on contributions and not tax free. Cash is currently a not half-bad option with 5%+ still available, especially if the current rate of inflation is to be believed, but this situation wont last long.

masonic

MQA said:

masonic said:

If the money has been invested in IFA selected funds then there is no reason to sell and then drip feed back into new funds, just make the switch.

I am switching out from my existing Pension proivder because the fees are high and the return is 1 % to 4 % at most.   With this in mind, should I be selecting different funds instead of switching over the existing ones? Also, compare the orignial with recent unit prices and compare mine to similar funds to see how mine are doing?

You should probably transfer as cash and then reinvest into new funds. You may have no choice depending on provider and existing funds. Pensions often use their own mirror funds that cannot be transferred. The funds themselves could have high fees. Better to start afresh, but drip feeding wouldn't make sense.

Past performance is something to be aware of, but shouldn't be the sole focus. Chasing the best performance over one period can lead you into funds that underperform over the next period. Better to opt for a low cost broadly diversified fund that consistently captures the average market return.

Roger175

Roger175 said:

MQA, from what you say above, you are facing some of the same issues we were/are. If you are not employed, you have little scope to put any meaningful amount into a pension (the rental income doesn't help). You also only have scope to put £20k per person per annum into S&S ISAs. This why we've put a lot into cash deposits, although general investment accounts are available albeit, no tax relief on contributions and not tax free. Cash is currently a not half-bad option with 5%+ still available, especially if the current rate of inflation is to be believed, but this situation wont last long.

MQA, just picking up on my post from yesterday, I thought I should clarify my comment about pension contributions - you can put money into a pension, even without the relevant earnings, it's just that you won't benefit from the tax relief that makes pensions so attractive. Given the sums involved and the limit on S&S ISA contributions, the pension route is probably still worth doing if you want to invest rather than save. Once inside the pension wrapper, any gains are exempt from both capital gains tax and general income taxation, however you will pay tax on the way out, albeit this can be managed to some extent pre SPA.

coastline

MQA said:

masonic said:

If the money has been invested in IFA selected funds then there is no reason to sell and then drip feed back into new funds, just make the switch.

I am switching out from my existing Pension proivder because the fees are high and the return is 1 % to 4 % at most.   With this in mind, should I be selecting different funds instead of switching over the existing ones? Also, compare the orignial with recent unit prices and compare mine to similar funds to see how mine are doing?

IF the pension has only been running a few years then returns wouldn't be that good ? That's if I've read correctly ? Look at B= Balanced and C=Cautious on the chart from say 2021. B and C are only up 20% at best in 5 years. Drip feeding will be even less  ?

Chart Tool | Trustnet

History suggests 10 or more years to be positive with equity investing . 

F787idBXIAA7ErL (674×386) (twimg.com)

MQA

Roger175 said:

...'. Cash is currently a not half-bad option with 5%+ still available, especially if the current rate of inflation is to be believed, but this situation wont last long.'

Would you mind sharing whether the 5%+ option is still avaiable?

I need to find 4.75% + accounts I think fixed term offers higher interests, that is ok for me.  As 'Member Exclusive Bond. It offers our best available fixed savings rate of 5.5% AER/gross a year for 18 months. And you can pay in a lump sum of up to £10,000.'

I am wondering what is the difference between a bond and fixed term savings account, as the ones I have looked at do not allow any withdrawls at all. if that is the case is one better than the other?

EthicsGradient

MQA said:

Roger175 said:

...'. Cash is currently a not half-bad option with 5%+ still available, especially if the current rate of inflation is to be believed, but this situation wont last long.'

Would you mind sharing whether the 5%+ option is still avaiable?

I need to find 4.75% + accounts I think fixed term offers higher interests, that is ok for me.  As 'Member Exclusive Bond. It offers our best available fixed savings rate of 5.5% AER/gross a year for 18 months. And you can pay in a lump sum of up to £10,000.'

I am wondering what is the difference between a bond and fixed term savings account, as the ones I have looked at do not allow any withdrawls at all. if that is the case is one better than the other?

"Bond" is a vague term; it usually means "fixed term and fixed rate" (and those 2 nearly always go together too, with no withdrawals allowed) for building societies or banks. The 5.5% looks like Nationwide; it's a pretty good deal if the term suits you. You can get around 5% from various providers, sometimes with restrictions, on easy-access accounts - see Best savings accounts: 5.02% easy access or 5.13% fixed rates (moneysavingexpert.com) (or the MoneyFactsCompare equivalent, which still lists Ulster Bank - you have to have/open a current account with them too, which may be a bit of faff - search for "Ulster" discussion on this forum). You'll also find at that link RCI Bank at 5.05% for 2 years, and SmartSave at 5.13% for 1 year. Everyone anticipates interest rates will drop a bit, so the longer the fix, the lower the rate at the moment.

Your other option could be a notice account - 5.25% available for 90 days notice (which will vary, like easy-access accounts, but hopefully stay slightly above them; check the Ts & Cs before signing up - a decent one will give you advance notice of at least the period you have to give notice, so that if they do decide to drop their rate a lot, you can get out without being forced to accept the new rate). Given your needs, a notice account might work well for you.