Zopa investments and general cautiousness

heterodyne76

I wonder if I'm typical of what people like Martin have commented on lately - the general reluctance of Brits to invest instead of save.

I had an email from Zopa today inviting me to open a beta investment account. I can't choose the S&S ISA option because I've maxed out this year's allowance, so I'd have to go with the General Investment Account.

My first thought is to ask how and when any gains are either paid out or added to the initial balance. The beginner guides the app provides don't go into that level detail. Then I ask if I have an equivalent to the Personal Allowance for these types of account. Some websites say there is a £500 allowance on dividends and that a dividend relates to paying shareholders, but will I be a shareholder in something via Zopa? I don't know.

Then I think about capital gains and whether it applies but I think that would only kick in if I were to close the Zopa account and withdraw it all?

As I type all this out I'm convincing myself that this sort of product, and investing in general (outside of pensions) isn't for me. It's advertised as a beginner-friendly way to begin investing but the guides are just too vague in comparison to how straightforward, in my opinion, savings are.

Despite decrying my own ignorance, I just get the impression that investing is for the experts and saving is for the average human.

jimjames

heterodyne76 said:

Despite decrying my own ignorance, I just get the impression that investing is for the experts and saving is for the average human.

You have some valid points but you've only got to read some of the posts on the boards here to realise that savings are not as simple as you might think maybe because it's what you know. Cash ISAs, personal tax allowances, fixed rate, regular savers etc all add complications

friolento

You are doing the right thing to inform yourself before committing any money. You are overly negative though - just because you don’t currently know much about investing doesn’t mean saving is any better. IMO, they both have a purpose - savings for anything you might need access to in the next 5 years, investing for anything you can afford not to touch for at least 5 years. Don’t try to become an expert trader - just stick to global index funds/ETFs. Familiarise yourself with passive investing. https://monevator.com/category/investing/passive-investing-investing/

GIAs shiuld be your last resort if you cannot have an ISA or a SIPP as the admin effort is significantly higher for GIAs, and your gains are taxable.

Note I have not looked at the Zopa offer so can’t comment on whether it is a good / affordable platform 

Eyeful

1. You can make investing as simple or as complicated as you like.

2. Making it complicated ,does not mean you will produce superior results to simple.
It just makes it more time consuming, harder to understand & follow.

3. Your so called "experts" like to make it look complicated to make you think you cannot do it without them.
That way more of your money will end up in their pockets and less in your pocket.

4. Investing is really only for money you will not touch for at least the next 10 years. 
Remember the longer you invest for, the higher your odds of winning the game.

5. No need to hurry, wait until the next tax year, then start an S&S ISA.
You can stick the money in all in one go, or feed it in by regular monthly amounts.

6. You can take the next 12 months to learn about "simple investing".  
If you then think its not for you, keep your money in a savings account.

7.. "Simple Investing" boils down to this either
(a) Low cost Major World Index Fund or ETF.
(b) Low cost Multi Asset Fund with a share/bond split at a risk level you are happy with.
This will give you a ready made portfolio.

8. Before starting to invest make sure you have any emergency savings account to cover  6 to 12 months of household bills to cover things like repairing a broken boiler. 

9. Take a look, to see if you are interested 
https://www.kroijer.com/
https://monevator.com/passive-fund-of-funds-the-rivals/
https://monevator.com/best-global-tracker-funds/

Eyeful

heterodyne76 :  One important to remember:

Anything to do with money will have risk attached to it, all that changes is the type and size of the risk
that includes money in your safe savings account protected by the FSCS up to £85k. 

Here the risk is inflation.
This is where your money will buy less at the end of the year than it did at the start of the year..
I learnt this the hard way, when in one year it reached over 25%!

RPI graph 1948-2025
https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czbh/mm23

Middle_of_the_Road

heterodyne76 said:

I wonder if I'm typical of what people like Martin have commented on lately - the general reluctance of Brits to invest instead of save.

I had an email from Zopa today inviting me to open a beta investment account. I can't choose the S&S ISA option because I've maxed out this year's allowance, so I'd have to go with the General Investment Account.

My first thought is to ask how and when any gains are either paid out or added to the initial balance. The beginner guides the app provides don't go into that level detail. Then I ask if I have an equivalent to the Personal Allowance for these types of account. Some websites say there is a £500 allowance on dividends and that a dividend relates to paying shareholders, but will I be a shareholder in something via Zopa? I don't know.

Then I think about capital gains and whether it applies but I think that would only kick in if I were to close the Zopa account and withdraw it all?

As I type all this out I'm convincing myself that this sort of product, and investing in general (outside of pensions) isn't for me. It's advertised as a beginner-friendly way to begin investing but the guides are just too vague in comparison to how straightforward, in my opinion, savings are.

Despite decrying my own ignorance, I just get the impression that investing is for the experts and saving is for the average human.

Not sure if this is possible, but could you open a new S&S ISA and request a transfer of funds from your existing ISA, thereby not breaking the £20k annual limit?
Perhaps someone knowledgeable could advise.

friolento

Middle_of_the_Road said:

heterodyne76 said:

I wonder if I'm typical of what people like Martin have commented on lately - the general reluctance of Brits to invest instead of save.

I had an email from Zopa today inviting me to open a beta investment account. I can't choose the S&S ISA option because I've maxed out this year's allowance, so I'd have to go with the General Investment Account.

My first thought is to ask how and when any gains are either paid out or added to the initial balance. The beginner guides the app provides don't go into that level detail. Then I ask if I have an equivalent to the Personal Allowance for these types of account. Some websites say there is a £500 allowance on dividends and that a dividend relates to paying shareholders, but will I be a shareholder in something via Zopa? I don't know.

Then I think about capital gains and whether it applies but I think that would only kick in if I were to close the Zopa account and withdraw it all?

As I type all this out I'm convincing myself that this sort of product, and investing in general (outside of pensions) isn't for me. It's advertised as a beginner-friendly way to begin investing but the guides are just too vague in comparison to how straightforward, in my opinion, savings are.

Despite decrying my own ignorance, I just get the impression that investing is for the experts and saving is for the average human.

Not sure if this is possible, but could you open a new S&S ISA and request a transfer of funds from your existing ISA, thereby not breaking the £20k annual limit?
Perhaps someone knowledgeable could advise.

An ISA transfer, perhaps a partial one, might be a technical option if there isn't good reason for keeping the cash where it is - but it will not contribute to understanding investment principles, or to making investment choices

Slinky

Eyeful said:

heterodyne76 :  One important to remember:

Anything to do with money will have risk attached to it, all that changes is the type and size of the risk
that includes money in your safe savings account protected by the FSCS up to £85k. 

£85K protection becomes £120K protection from Monday.