New to Investing, Seeking Advice

Domnhallaich

Hi All,

Hoping you can help steer me in the right direction.  I am a 45 yo who has decided to start investing, so that I have more money to enjoy in retirement or, leave it to my kids if I pop it before I get to enjoy it.  But I am feeling a little overwhelmed at the options.

One thing that seems to be a no brainer is the setting up of a Stocks and Shares ISA and investing in Accumulating ETFs, so that any dividends automatically get re-invested which should help with compound interest.  My understanding is that there will be no tax to pay because its under the ISA.

Assuming I am not mistaken (and please correct me if I am) my first challenge is deciding where to invest.  So far I have heard two things:

1. S&P 500 has performed incredibly well over the past 10-15 years.

2. You should not put all yours eggs in the S&P 500 basket.

What is the best approach here? And what else should I be looking at, besides stocks/ETFs because I saw someone say in another thread that to be risk diverse, you need to look at alternatives, like metals, bonds, gilts etc.

Please help.

aroominyork

A similar question is being discussed on this thread which was started a few days ago https://forums.moneysavingexpert.com/discussion/6650747/etf-039-s-can-039-t-decide-between-s-p500-or-all-world/p1 I suggest you start there.

Middle_of_the_Road

Domnhallaich said:

Hi All,

Hoping you can help steer me in the right direction.  I am a 45 yo who has decided to start investing, so that I have more money to enjoy in retirement or, leave it to my kids if I pop it before I get to enjoy it.  But I am feeling a little overwhelmed at the options.

One thing that seems to be a no brainer is the setting up of a Stocks and Shares ISA and investing in Accumulating ETFs, so that any dividends automatically get re-invested which should help with compound interest.  My understanding is that there will be no tax to pay because its under the ISA.

Assuming I am not mistaken (and please correct me if I am) my first challenge is deciding where to invest.  So far I have heard two things:

1. S&P 500 has performed incredibly well over the past 10-15 years.

2. You should not put all yours eggs in the S&P 500 basket.

What is the best approach here? And what else should I be looking at, besides stocks/ETFs because I saw someone say in another thread that to be risk diverse, you need to look at alternatives, like metals, bonds, gilts etc.

Please help.

If you will not need access to the invested funds until you retire, investing in a SIPP could be a better option.
As to what to invest in, there are many who are moving away from heavily weighted American funds, which they consider overvalued. This may or may not be the right move. I'm sure you'll get a few suggestions from the more knowledgeable on here.

Domnhallaich

aroominyork said:

A similar question is being discussed on this thread which was started a few days ago https://forums.moneysavingexpert.com/discussion/6650747/etf-039-s-can-039-t-decide-between-s-p500-or-all-world/p1 I suggest you start there.

Thanks, I put my query into that thread.

Domnhallaich

Middle_of_the_Road said:

Domnhallaich said:

Hi All,

Hoping you can help steer me in the right direction.  I am a 45 yo who has decided to start investing, so that I have more money to enjoy in retirement or, leave it to my kids if I pop it before I get to enjoy it.  But I am feeling a little overwhelmed at the options.

One thing that seems to be a no brainer is the setting up of a Stocks and Shares ISA and investing in Accumulating ETFs, so that any dividends automatically get re-invested which should help with compound interest.  My understanding is that there will be no tax to pay because its under the ISA.

Assuming I am not mistaken (and please correct me if I am) my first challenge is deciding where to invest.  So far I have heard two things:

1. S&P 500 has performed incredibly well over the past 10-15 years.

2. You should not put all yours eggs in the S&P 500 basket.

What is the best approach here? And what else should I be looking at, besides stocks/ETFs because I saw someone say in another thread that to be risk diverse, you need to look at alternatives, like metals, bonds, gilts etc.

Please help.

If you will not need access to the invested funds until you retire, investing in a SIPP could be a better option.
As to what to invest in, there are many who are moving away from heavily weighted American funds, which they consider overvalued. This may or may not be the right move. I'm sure you'll get a few suggestions from the more knowledgeable on here.

I think I have a SIPP which was converted from an old workplace pension from an old job.  These are things I want to consider but the tax savings of the ISA interest me but it seems having a diversified portfolio is a good way to look at it.

dunstonh

One thing that seems to be a no brainer is the setting up of a Stocks and Shares ISA and investing in Accumulating ETFs, so that any dividends automatically get re-invested which should help with compound interest.  My understanding is that there will be no tax to pay because its under the ISA.

I would not call either things a no-brainer.

for example
a) The pension tax wrapper is more efficient than the ISA tax wrapper for later life money.  
b) ETFs are a valid option but most consumers use Unit Trusts/OEICs.

Assuming I am not mistaken (and please correct me if I am) my first challenge is deciding where to invest.  So far I have heard two things:

1. S&P 500 has performed incredibly well over the past 10-15 years.

2. You should not put all yours eggs in the S&P 500 basket.

 Global ex US and US ex Global cycle each other.   So, it comes at no surpise that one has been better than the other in any cycle.      In the previous cycle (ending 2024), US was the best.  In the cycle before that global was best).   Since 2025, the global has been best.   Whether that indicates a shift in the cycles is yet to be determined as you can only tell with hindsight when it actually happened, but it does highlight that taking a single country/region focus does come with risks.   So, global including US is the sensible choice.

Middle_of_the_Road

Domnhallaich said:

Middle_of_the_Road said:

Domnhallaich said:

Hi All,

Hoping you can help steer me in the right direction.  I am a 45 yo who has decided to start investing, so that I have more money to enjoy in retirement or, leave it to my kids if I pop it before I get to enjoy it.  But I am feeling a little overwhelmed at the options.

One thing that seems to be a no brainer is the setting up of a Stocks and Shares ISA and investing in Accumulating ETFs, so that any dividends automatically get re-invested which should help with compound interest.  My understanding is that there will be no tax to pay because its under the ISA.

Assuming I am not mistaken (and please correct me if I am) my first challenge is deciding where to invest.  So far I have heard two things:

1. S&P 500 has performed incredibly well over the past 10-15 years.

2. You should not put all yours eggs in the S&P 500 basket.

What is the best approach here? And what else should I be looking at, besides stocks/ETFs because I saw someone say in another thread that to be risk diverse, you need to look at alternatives, like metals, bonds, gilts etc.

Please help.

If you will not need access to the invested funds until you retire, investing in a SIPP could be a better option.
As to what to invest in, there are many who are moving away from heavily weighted American funds, which they consider overvalued. This may or may not be the right move. I'm sure you'll get a few suggestions from the more knowledgeable on here.

I think I have a SIPP which was converted from an old workplace pension from an old job.  These are things I want to consider but the tax savings of the ISA interest me but it seems having a diversified portfolio is a good way to look at it.

Most times a SIPP will be more tax efficient. Whatever money you put in, the gov. will contribute in the form of tax relief.

https://www.hl.co.uk/pensions/tax-relief

Better to keep this discussions to your thread here, than confuse the other thread.

Domnhallaich

Middle_of_the_Road said:

Domnhallaich said:

Middle_of_the_Road said:

Domnhallaich said:

Hi All,

Hoping you can help steer me in the right direction.  I am a 45 yo who has decided to start investing, so that I have more money to enjoy in retirement or, leave it to my kids if I pop it before I get to enjoy it.  But I am feeling a little overwhelmed at the options.

One thing that seems to be a no brainer is the setting up of a Stocks and Shares ISA and investing in Accumulating ETFs, so that any dividends automatically get re-invested which should help with compound interest.  My understanding is that there will be no tax to pay because its under the ISA.

Assuming I am not mistaken (and please correct me if I am) my first challenge is deciding where to invest.  So far I have heard two things:

1. S&P 500 has performed incredibly well over the past 10-15 years.

2. You should not put all yours eggs in the S&P 500 basket.

What is the best approach here? And what else should I be looking at, besides stocks/ETFs because I saw someone say in another thread that to be risk diverse, you need to look at alternatives, like metals, bonds, gilts etc.

Please help.

If you will not need access to the invested funds until you retire, investing in a SIPP could be a better option.
As to what to invest in, there are many who are moving away from heavily weighted American funds, which they consider overvalued. This may or may not be the right move. I'm sure you'll get a few suggestions from the more knowledgeable on here.

I think I have a SIPP which was converted from an old workplace pension from an old job.  These are things I want to consider but the tax savings of the ISA interest me but it seems having a diversified portfolio is a good way to look at it.

Most times a SIPP will be more tax efficient. Whatever money you put in, the gov. will contribute in the form of tax relief.



Better to keep this discussions to your thread here, than confuse the other thread.

I already have a workplace pension though, would my tax relief not already be used up by that? And tax relief aside, would I need potentially make more money by investing in stocks and shares compared to a SIPP?

Middle_of_the_Road

Domnhallaich said:

Middle_of_the_Road said:

Domnhallaich said:

Middle_of_the_Road said:

Domnhallaich said:

Hi All,

Hoping you can help steer me in the right direction.  I am a 45 yo who has decided to start investing, so that I have more money to enjoy in retirement or, leave it to my kids if I pop it before I get to enjoy it.  But I am feeling a little overwhelmed at the options.

One thing that seems to be a no brainer is the setting up of a Stocks and Shares ISA and investing in Accumulating ETFs, so that any dividends automatically get re-invested which should help with compound interest.  My understanding is that there will be no tax to pay because its under the ISA.

Assuming I am not mistaken (and please correct me if I am) my first challenge is deciding where to invest.  So far I have heard two things:

1. S&P 500 has performed incredibly well over the past 10-15 years.

2. You should not put all yours eggs in the S&P 500 basket.

What is the best approach here? And what else should I be looking at, besides stocks/ETFs because I saw someone say in another thread that to be risk diverse, you need to look at alternatives, like metals, bonds, gilts etc.

Please help.

If you will not need access to the invested funds until you retire, investing in a SIPP could be a better option.
As to what to invest in, there are many who are moving away from heavily weighted American funds, which they consider overvalued. This may or may not be the right move. I'm sure you'll get a few suggestions from the more knowledgeable on here.

I think I have a SIPP which was converted from an old workplace pension from an old job.  These are things I want to consider but the tax savings of the ISA interest me but it seems having a diversified portfolio is a good way to look at it.

Most times a SIPP will be more tax efficient. Whatever money you put in, the gov. will contribute in the form of tax relief.



Better to keep this discussions to your thread here, than confuse the other thread.

I already have a workplace pension though, would my tax relief not already be used up by that? And tax relief aside, would I need potentially make more money by investing in stocks and shares compared to a SIPP?

I'm no expert, but as I understand it you can contribute to multiple pensions up to your annual earnings, so deducting workplace contributions would give you the remaining allowance.
Max. annual allowance is £60K this figure would include the added tax relief which the provider will claim for you.
 
Edited to add:
You can also benefit from investing within in S&S ISA in respect of the tax advantages, but there are no guarantees of making any money with investments.

Albermarle

Domnhallaich said:

Middle_of_the_Road said:

Domnhallaich said:

Middle_of_the_Road said:

Domnhallaich said:

Hi All,

Hoping you can help steer me in the right direction.  I am a 45 yo who has decided to start investing, so that I have more money to enjoy in retirement or, leave it to my kids if I pop it before I get to enjoy it.  But I am feeling a little overwhelmed at the options.

One thing that seems to be a no brainer is the setting up of a Stocks and Shares ISA and investing in Accumulating ETFs, so that any dividends automatically get re-invested which should help with compound interest.  My understanding is that there will be no tax to pay because its under the ISA.

Assuming I am not mistaken (and please correct me if I am) my first challenge is deciding where to invest.  So far I have heard two things:

1. S&P 500 has performed incredibly well over the past 10-15 years.

2. You should not put all yours eggs in the S&P 500 basket.

What is the best approach here? And what else should I be looking at, besides stocks/ETFs because I saw someone say in another thread that to be risk diverse, you need to look at alternatives, like metals, bonds, gilts etc.

Please help.

If you will not need access to the invested funds until you retire, investing in a SIPP could be a better option.
As to what to invest in, there are many who are moving away from heavily weighted American funds, which they consider overvalued. This may or may not be the right move. I'm sure you'll get a few suggestions from the more knowledgeable on here.

I think I have a SIPP which was converted from an old workplace pension from an old job.  These are things I want to consider but the tax savings of the ISA interest me but it seems having a diversified portfolio is a good way to look at it.

Most times a SIPP will be more tax efficient. Whatever money you put in, the gov. will contribute in the form of tax relief.



Better to keep this discussions to your thread here, than confuse the other thread.

I already have a workplace pension though, would my tax relief not already be used up by that? And tax relief aside, would I need potentially make more money by investing in stocks and shares compared to a SIPP?

Normally money in a SIPP or a workplace pension, is invested in stocks and shares, so if you had similar investments in a pension or outside a pension, you would get the same result, except you would get better tax benefits with the pension.

How about taking a step back and looking more closely at how your workplace pension is invested. Have you ever done that? Could be an idea to say which provider it is, as some have more choice of investments than others.
Most likely your best and easiest option is to increase your pension contributions at work. 
It is unlikely that you have used up any potential tax relief.

Domnhallaich

Thanks for the feedback, I will look into the SIPP and Workplace Pension options but while I want to ensure I have a decent income in retirement, I also want to try and build a bit of wealth that can be accessed on say 15 yeara time - so I definitely want to look into a stocks and shares ISA.

Can anyone give me a steer on what I should be investing in?  I see world ETFs are suggested over S&P500 whereas some others invest in the S&P500 plus the world one or, several more localosed ETFs.  With the investing part, I want to have an element of set and forget - knowing that I have spreads my investments in such a way that there is a good chance for them to make money but, also not have to check every 5 min due to market conditions.