Not sure how to manage L-ISA, S&S ISA & halting of SIPP

B0bbyEwing

For the purpose of this, let's ignore the workplace pension before we deviate down that road.

Current situation - I pay in an amount each month to my SIPP (Fidelity). Come the end of the tax year I see what the bank balance is like & how much I feel we can afford to say goodbye to & split that amount 50/50 between the wife & I, putting it in our L-ISA accounts (AJ Bell).

I've since learned that with our (BR) tax situation, a L-ISA is a better option for us than a SIPP & so I've been looking to change the money that was going to the SIPP & put it in the L-ISA & there's the problem.

I Googled for a L-ISA with no transaction fees & Google listed AJ Bell, Dodl & Tembo.

Well I can't trust that answer now because that's absolute nonsense as I get charged £1.50 every time I put money in to my AJ Bell L-ISA (or rather put money in to a selected fund).

So doing what I do will be £18/yr, despite what Google says. It's also my understanding that "time IN THE market" is better than "timING the market", so sitting that money aside in an account somewhere & then dumping it in to the L-ISA is probably not such a good idea either.

Which is why I'm here to ask about suggestions on a better strategy.

My next thought was perhaps put that money per month in to a S&S ISA, then at the end of the year just transfer that amount over to the L-ISA (if that's possible).

But not sure if that's the best course of action either. So for the sake of asking more experienced people, I'll just go ahead & ask.

FWIW I've just under 7yrs left that I can pay in to my L-ISA. Wife is just under 6yrs. The contributions would then start going to the SIPP once that date passes.

Sam_666

No, you cant skip workplace pension subject. That is first point of call for any planning.
Everything else follows.

Lisa gives you same tax boost as sipp. Wise man would use lisa S&S and not cash one.
Many platforms offer free regular investments.
It would be good idea to utilise sipp after filling up lisa.
However, as I said at start, planning needs to start first with workplace pension, unless you are allergic to free money.

B0bbyEwing

The reason I'm skipping discussing workplace pension is because everyone tells you to put more in to it to get employer matching … because they work for good employers & seem to assume that because they do then everyone else must.

My employer wouldn't put £0.01 in if they didn't have to. As such they will only pay in the bare minimum & only ever will do, and so I pay in the minimum also.

The money beyond that that I can afford to give up … currently goes in to my SIPP.

People then move from that to start talking about salary sacrifice. Been there too. No, again my employer wont entertain it at all.

So it's not a case of "allergic to free money", it's knowing that I'm not getting any more out of it. I could put an extra 30% in but my employer will stay putting the bare minimum in.

But yes, my L-ISA is a S&S one, not cash.

I also don't fully follow the numbers but it was something along the lines of when you come to take money out come retirement - a L-ISA being better than a SIPP in my tax situation (BR working, BR retired).

My current monthly contributions would not max out the L-ISA's annual cap. If I could afford to give more then my current thinking would be to fill the L-ISA up to the £4k limit & anything over that would go in to the SIPP.

So, kind of back to where I was in post #1 there.

DRS1

The £1.50 sounds like a dealing charge. That is quite cheap. Iweb (now SWSD) charge £5 per deal.

But since the change to SWSD they have introduced a free regular investing facility which allows you to set up a payment in to the ISA and then an investment of that payment in with no dealing fee. The trouble is I am not sure if SWSD offer LISAs.

I do not know if such a thing exists at AJBell or for LISAs generally but it may be worth looking around to see if there is such a thing for a LISA (and if necessary transfer your LISA to a platform that offers it)

B0bbyEwing

Yeah that's why I put it to Google but Google was incorrect.

Still, even if I have to pay a few, I'm wondering about the best way moving forward. Taking the hit each month, setting it aside, setting it aside in a S&S ISA or whatever else.

Albermarle

Many platforms offer free regular investments.

Yes, but not many platforms offer LISAs.

I Googled for a L-ISA with no transaction fees & Google listed AJ Bell, Dodl & Tembo

Could be some confusion over the naming. DODL is like the baby sister of A J Bell. Less funds available, app only, LISA available , lower platform charge of 0.15%, and NO transaction fees.

However it is often referred to as AJ BELL DODL, which may be confusing the issue.

booneruk

I know with Interactive Investor that only regular investing (using that precise service they offer rather than manually triggering trades) avoids dealing charges.

Ahh, here - seems to be the same with AJ Bell: "No charges for regular investing"
https://www.ajbell.co.uk/learn/what-is-regular-investing

B0bbyEwing

https://forums.moneysavingexpert.com/discussion/comment/82067683#Comment_82067683

I know all about naming!

Currently healing from a bad injury & I found that slightly altering my question had Google telling me that I'll be good to go next week all the way up to a month, 6 months & that I might never heal again. Very frustrating & probably why my specialist wanted me to stop Googling 😂

Maybe my eyes were blurry & I thought a comma was somewhere it wasn't then so I'll have to hold my hands up on that if so. I was wearing my glasses too. I'll look at that Dodl as if I can get what I'm invested in there then it makes sense to do it.

I know I've Fidelity Index World P in one wrapper & HSBC FTSE All World in another but can't remember which is which, LISA vs SIPP.

B0bbyEwing

Oh thanks. I'll take a closer look at that.

With AJ all I've ever done is 1 time deposits at tax year end. I've never made monthly contribs with them.

Albermarle

I know I've Fidelity Index World P in one wrapper & HSBC FTSE All World in another but can't remember which is which, LISA vs SIPP.

The difference between the two funds is not a lot, so apart from some minor differences, they are effectively interchangeable.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82067747#Comment_82067747

But you are thinking about it aren't you - otherwise you wouldn't have mentioned £18 a year.

I don't know about AJBell but with SWSD you can do a one off investment using their regular investment facility. It happens on a day in the future so you have no way of knowing the price at which the deal will be done and maybe not every investment is available for the regular dealing facility but I find the once and done aspect quite useful.