Cash ISA to S&S ISA / Pension

winkowinko

I have always been very cautious with my savings, in that they have been held in cash ISA's over the years. I have amassed close to 6 figures in savings (80% held in a fixed term ISA earning 4.91%, which is due to mature in August). I'm 46 and mortgage free. Work part time earning £25k.

I have done a fair bit of research over the last few months, and think I am ready to move a large chunk of those saving into S&S, and also start drip feeding into a SIPP that I plan to set up. I know the funds that I want to invest in (HSBC global strategy + an index tracker)

My plan was to just transfer a lump sum (£40k) from my cash ISA to the S&S one in August, but then it got me wondering whether it would be better to drip feed it over the course of 12 months?

I realise I can't transfer directly from cash ISA to pension, and I'm aware of the limits that I can add to my pension annually, but would there be any advantage in drip feeding it, rather than a one off contribution?

Albermarle

A very common question.
The answer is that statistically you would be better off just adding a lump sum, but you might be unlucky and just get the timing wrong.
You can have a halfway house where you say add 40% now, 30% in 3 months and the last 30% later, or something like that.
If you are saving for retirement, pension is the best bet due to the tax advantages.
If you will need the money before retirement, but not for a few years then S&S ISA is the better option. 

You might have problems transferring a cash ISA to a S&S ISA in tranches. It might be easier to transfer the £40K and keep some of it in the S&S ISA as cash, or in a money market fund. 

winkowinko

thanks for your reply @Albermarle

Yes, would need to check with Kent Reliance to see if they allow partial transfers out. Whilst I think I would prefer to drip feed, I don't think I want to be going through the agro of a transfer every few months. Also, I have already used this year's ISA allowance, so with drawing £20k and then depositing it into the S&S ISA is not an option.

I will have a look into money market funds.

Are there any other ways around this if I can't do a partial transfer?