Getting started with investing: S&S ISA?

fistfulofsteel

I have a lot of cash savings (mostly cash ISAs) earning an average of 4.9% and am wondering about investing some of them for a better return, while still keeping a few years of expenses in cash. I've already put a decent amount this year into my SIPP but am reluctant to put all my eggs in that basket as I won't be able to access until 57 at the earliest. I'm 36 and self employed in an industry that's unlikely to exist in 20 years, so am looking for a way to put money aside to get me through my late 40s / early 50s. Is the S&S ISA the best option?

I already have a cash ISA account with Trading 212 so is it as simple as opening an S&S ISA with them and putting money into a big mainstream fund? My SIPP is split between Vanguard LS60 and LS80: are these also available for S&S ISA investing?

I've heard you should only invest money you don't need access to for a long time, so at what point do people usually start moving money back into cash if they think they're approaching a point where they'll need it?

InvesterJones

Well done - sounds like you've done good research already. Yes, it's possible to invest in the same funds - ISA vs SIPP is just the wrapper around it.

The point of having a cash buffer is you get to chose when you need the money whether to take it from your stocks and shares, or cash - if the investments are doing well then take it from stocks and shares (which is psychologically hard), if they're not, cash - but with the intention of selling stocks and shares to rebuild the cash buffer later. Or half and half. If you know in advance when you'll need the money then moving what you need out of stocks and shares in the lead up will stabilise prices - if you're concerned about price fluctuations then drip-withdrawing over a few months might be calmer.

ColdIron

fistfulofsteel said:

I already have a cash ISA account with Trading 212 so is it as simple as opening an S&S ISA with them and putting money into a big mainstream fund? My SIPP is split between Vanguard LS60 and LS80: are these also available for S&S ISA investing?

Open ended funds (OEICs) such as VLS60 and VLS80 can be held in an ISA but not with Trading 212 who only offer shares, investment trusts and ETFs

wmb194

ColdIron said:

fistfulofsteel said:

I already have a cash ISA account with Trading 212 so is it as simple as opening an S&S ISA with them and putting money into a big mainstream fund? My SIPP is split between Vanguard LS60 and LS80: are these also available for S&S ISA investing?

Open ended funds (OEICs) such as VLS60 and VLS80 can be held in an ISA but not with Trading 212 who only offer shares, investment trusts and ETFs

T212 offers ETF versions of these but they are denominated in euros (listed in Italy and Germany) and they have a slightly different asset mix to the UK OEICs, IIRC more euro bonds and less exposure to UK equities.

Albermarle

I have a lot of cash savings (mostly cash ISAs) earning an average of 4.9% and am wondering about investing some of them for a better return,

In the long run, investing should normally give better returns than cash. However nothing is guaranteed in the short to medium term ( which means 5 to > 10 years, opinions vary).
Normally trying to time the market is very difficult, but with cash interest rates at nearly 5% ( higher than inflation) and stock markets a bit 'toppy' especially in the US, I would not be diving in head first at the moment, but that is just a personal opinion and no harm in getting started at least.

LL_USS

@fistfulofsteel I am searching MSE for discussions about starting investments and find this thread of yours. I hope to get some more discussions going on so i can get some tips for myself too.

Funny a few months ago I was thinking "look at how well the market is doing - I should have put money in S&S earlier" then laughed at myself as I had only started to gather more substantial savings for a couple of years and it was still good I have some cash buffers before thinking about S&S - also I can only invest when I feel a bit more confident about my own understanding of what it can involve.

I am transferring cash LISAs from Tembo to Dodl now to invest - already 6 weeks I think but the transfer has not been completed. It is okay as I am still not quite ready to dive in S&S yet, given the market votality at the moment. I know "time in the market not timing the market" - still...

How about you? Do you feel you are ready to invest yet?

gesdt50

LL_USS said:

@fistfulofsteel I am searching MSE for discussions about starting investments and find this thread of yours. I hope to get some more discussions going on so i can get some tips for myself too.

Funny a few months ago I was thinking "look at how well the market is doing - I should have put money in S&S earlier" then laughed at myself as I had only started to gather more substantial savings for a couple of years and it was still good I have some cash buffers before thinking about S&S - also I can only invest when I feel a bit more confident about my own understanding of what it can involve.

I am transferring cash LISAs from Tembo to Dodl now to invest - already 6 weeks I think but the transfer has not been completed. It is okay as I am still not quite ready to dive in S&S yet, given the market votality at the moment. I know "time in the market not timing the market" - still...

How about you? Do you feel you are ready to invest yet?

Most of the the established trading companies and now platforms(nerded out) and near do wells are from private education and higher to middle income families and want to take money of the lower class rainy day savers so these traders and platforms take high costs for single trades that don't look all that much until you actually spend a bit more time looking at the sums and one can see why they want to leech of poorer educated both literacy & numerical poor folk to fund their lifestyles

LL_USS

@gesdt50 I used to put all my spare money into working on my own house and moving up to a better one, better area. Now with my younger kid going to leave the nest soon, I don't wish to work on properties any more, and I think I'll keep investing on my children and helping them instead. Yet I have this lot of a few years' worth of LISAs, which I won't be able to use till am 60 years old, so that's the sum I consider investing otherwise the cash would lose purchase value over such a long time. I want to learn to invest too anyway so I am thiking of a couple of ETFs - I am just waiting to see where the market is going in the next few months, knowing I may miss the opportunity but as the economic notion of loss aversion, people tend to feel the pain of a loss more strongly than the pleasure of an equivalent gain.

masonic

We're really in a golden age of investment where it is no longer necessary to pay a high level of fees. High quality funds are available for a few basis points per year, and platforms are available for less than they cost to operate. Investment minimums have been slashed too, so the only real barrier to entry with those with some money to invest are attitudes and beliefs.

Eyeful

Why do you have both LS60 and LS80 at the same time?

1. Tax shelters
Pensions are for very long term investing.
Stocks and shares ISA's for investments you will not touch for at least 10 years.
Cash ISA's for money you will need within 5 years.

2. Target Day funds: Should be of interest to you & answer your question.
https://www.ii.co.uk/ii-accounts/sipp/sipp-investment-ideas/target-retirement-funds

3. Sequence of Risk when approaching retirement, very important:

https://www.youtube.com/watch?v=oyzR7tMmj9o


 

Albermarle

gesdt50 said:

LL_USS said:

@fistfulofsteel I am searching MSE for discussions about starting investments and find this thread of yours. I hope to get some more discussions going on so i can get some tips for myself too.

Funny a few months ago I was thinking "look at how well the market is doing - I should have put money in S&S earlier" then laughed at myself as I had only started to gather more substantial savings for a couple of years and it was still good I have some cash buffers before thinking about S&S - also I can only invest when I feel a bit more confident about my own understanding of what it can involve.

I am transferring cash LISAs from Tembo to Dodl now to invest - already 6 weeks I think but the transfer has not been completed. It is okay as I am still not quite ready to dive in S&S yet, given the market votality at the moment. I know "time in the market not timing the market" - still...

How about you? Do you feel you are ready to invest yet?

Most of the the established trading companies and now platforms(nerded out) and near do wells are from private education and higher to middle income families and want to take money of the lower class rainy day savers so these traders and platforms take high costs for single trades that don't look all that much until you actually spend a bit more time looking at the sums and one can see why they want to leech of poorer educated both literacy & numerical poor folk to fund their lifestyles

Probably worth pointing out, that discussions on these forums about investing tend to strongly discourage anybody inexperienced looking at trading, or buying and selling individual shares.
Mostly people are pointed to buy and hold strategies, using simple cheap global trackers or multi asset funds on low cost platforms.
Also normally in tax friendly environments, like S&S ISAs or pensions.