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  • FIRST POST
    • pkpk
    • By pkpk 21st Oct 19, 10:32 AM
    • 50Posts
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    pkpk
    ISA Help
    • #1
    • 21st Oct 19, 10:32 AM
    ISA Help 21st Oct 19 at 10:32 AM
    I'm pretty bad with money and investing and looking to make positive improvements.
    I'm in my 40's and have managed to save some money here and there but nothing that really adds up to a great deal and sadly no pension.

    My first task is to deal with my ISA situation and was hoping to get some help. I set up an ISA with Natwest (then called a Balanced Growth fund and now called a managed Growth Fund) 10 years ago paying in 50 per month. The balance is 8k but after reading about the poor performance of bank ISA's I was considering transferring it to something like a Vanguard VLS60.

    5 years of my current fund performance is 6% and 5 years of the Vanguard is 51% although I'm not sure I'm reading the charts correctly. I can afford to put more in now and wanted to check that this fund might be a good start to quickly transfer to while I learn more about investing.

    Thanks
    PK
Page 1
    • eskbanker
    • By eskbanker 21st Oct 19, 10:58 AM
    • 11,613 Posts
    • 14,399 Thanks
    eskbanker
    • #2
    • 21st Oct 19, 10:58 AM
    • #2
    • 21st Oct 19, 10:58 AM
    Past performance doesn't signify what to expect in future, so you should evaluate also funds based on their fundamentals, i.e. volatility, structure, objectives, diversification, etc, as well as determining which platform(s) to use as a separate exercise, plus associated costs for both funds and platforms (which is where bank offerings are typically weak).

    Personally I'm not familiar with NatWest's products but have to agree that 6% over the past five years falls some way short of what most would consider realistic for a growth fund during a bull market, although perhaps at least some of that shortfall is down to fund and/or platform costs?

    On the face of it, VLS60, on a low-cost platform, is likely to be a better option than your NatWest product (assuming it's consistent with your risk tolerance, etc).

    However, not having a pension is not a good place to be in your 40s, and apparent lack of savings (i.e. in liquid cash form, rather than investments) is far from ideal, so worth considering your finances in the round rather than focusing specifically on your S&S ISA....
    • Linton
    • By Linton 21st Oct 19, 11:10 AM
    • 11,371 Posts
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    Linton
    • #3
    • 21st Oct 19, 11:10 AM
    • #3
    • 21st Oct 19, 11:10 AM
    Unfortunately its difficult to find historical information on the fund since the new version has only been around for about 6 months whilst the old one no longer exists.


    However what little data I have found suggests that the Natwest (now RBS) fund is pretty average for its type. So I suggest you are probably reading the data wrongly. However one point to note is that when you are drip feeding you cant base your performance calculations on the full time period since half your contributions have only been invested for less than half the time.


    Perhaps you can say more about the data you have - can you provide a link or say where it came from. I agree with your 51% over 5 years for VLS60. It could be that the 6% is a per year average which would equate to about 34% over 5 years.
    • pkpk
    • By pkpk 21st Oct 19, 11:40 AM
    • 50 Posts
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    pkpk
    • #4
    • 21st Oct 19, 11:40 AM
    • #4
    • 21st Oct 19, 11:40 AM
    Thanks Linton. I think as they merged the fund the data is missing online. I have tried to photograph my statement which is where I got the info from but I don't think you can past an image into the posts here.

    Info for the fund it merged with is available though. I can't post links here either as a new user but a quick google of RBS Managed Growth Fund 1 Acc will give you the FT age with the perforce.
    • pkpk
    • By pkpk 21st Oct 19, 11:45 AM
    • 50 Posts
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    pkpk
    • #5
    • 21st Oct 19, 11:45 AM
    • #5
    • 21st Oct 19, 11:45 AM
    Agree with the advice completely. I have tried a financial advisor but I fell below the savings threshold for them to talk to.
    The more I look into it myself the more confusing it is and the more conflicting advice I seem to get. This just leads to avoiding decision making which is how I have ended up here really.

    I was told to avoid pensions in favour of ISA's a while ago and this doesn't seem like great advice at all now.
    • Linton
    • By Linton 21st Oct 19, 12:15 PM
    • 11,371 Posts
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    Linton
    • #6
    • 21st Oct 19, 12:15 PM
    • #6
    • 21st Oct 19, 12:15 PM
    Thanks Linton. I think as they merged the fund the data is missing online. I have tried to photograph my statement which is where I got the info from but I don't think you can past an image into the posts here.

    Info for the fund it merged with is available though. I can't post links here either as a new user but a quick google of RBS Managed Growth Fund 1 Acc will give you the FT age with the perforce.
    Originally posted by pkpk

    Ah yes - the 6% of the RBS fund given on the FT website is for the 5-6 months the fund has been in existance. I dont think that figure can be relied on as it is based on the price when the fund started which may not have been realistic, or may have been put low in order to attract new investors. However you cant compare 6% or whatever over 6 months with a total of 51% over 5 years. Obviously the longer you invest for the greater the return. Make the comparison again in 5 years time!
    • grumiofoundation
    • By grumiofoundation 21st Oct 19, 12:19 PM
    • 160 Posts
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    grumiofoundation
    • #7
    • 21st Oct 19, 12:19 PM
    • #7
    • 21st Oct 19, 12:19 PM
    I was told to avoid pensions in favour of ISA's a while ago and this doesn't seem like great advice at all now.
    Originally posted by pkpk
    Key point here - neither ISAs nor pensions are a specific products but simply tax wrappers for your investments/cash.

    If you have the opportunity to pay into a workplace pension you should at a minimum look at paying in enough to maximise any employer contributions.
    • pkpk
    • By pkpk 21st Oct 19, 12:40 PM
    • 50 Posts
    • 3 Thanks
    pkpk
    • #8
    • 21st Oct 19, 12:40 PM
    • #8
    • 21st Oct 19, 12:40 PM
    I'm self employed which is another spanner in the works!
    • Albermarle
    • By Albermarle 21st Oct 19, 12:53 PM
    • 1,722 Posts
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    Albermarle
    • #9
    • 21st Oct 19, 12:53 PM
    • #9
    • 21st Oct 19, 12:53 PM
    '
    m self employed which is another spanner in the works
    There is still a tax advantage to investing in a pension rather than an ISA- at least 6.25% but can be more. .
    The downside is that money in a pension is not accessible until you are at least 55.

    You can invest in VLS 60 ( or something similar ) within a pension or an ISA.
    • pkpk
    • By pkpk 21st Oct 19, 12:55 PM
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    pkpk
    Thanks for that. It sounds like a good idea to set a pension up even it's late. Apologies for lack of knowledge but would you set the pension up directly with Vanguard or do pensions need to be set up somewhere else?
    • xylophone
    • By xylophone 21st Oct 19, 1:26 PM
    • 31,594 Posts
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    xylophone
    Thanks for that. It sounds like a good idea to set a pension up even it's late. Apologies for lack of knowledge but would you set the pension up directly with Vanguard or do pensions need to be set up somewhere else?
    Vanguard do not currently offer a pension but they offer an ISA.

    https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-isa?cmpgn=PS0617UKPABIS0002&gclid=EAIaIQobChMI9JG9 26ut5QIVQUTTCh0dRAJ2EAAYASAAEgKCGPD_BwE&gclsrc=aw. ds

    https://www.vanguardinvestor.co.uk/need-help/answer/do-you-offer-a-pension-or-a-sipp

    The important thing is to get started on the pension- you can always transfer to Vanguard if and when.

    https://www.simplybusiness.co.uk/knowledge/articles/2018/01/self-employed-pension-guide/

    There is the possibility of a simple stakeholder as a start.

    https://www.cavendishonline.co.uk/stakeholder-pension
    • pkpk
    • By pkpk 21st Oct 19, 1:53 PM
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    pkpk
    Thanks for that.

    Would it make sense to transfer my Natwest Isa to Vanguard sand set up a separate pension?
    • xylophone
    • By xylophone 21st Oct 19, 3:21 PM
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    xylophone
    If you are happy with Vanguard and want only Vanguard funds then you could consider a transfer,

    With regard to a pension, you have a choice of providers - the stakeholder would be simple to begin with.

    Something to read

    https://www.amazon.co.uk/DIY-Pensions-Simple-Retirement-Planning/dp/1520782683

    Have you obtained a state pension forecast?
    https://www.gov.uk/check-state-pension
    • pkpk
    • By pkpk 21st Oct 19, 4:53 PM
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    pkpk
    Thanks for that. I do have a state forecast. That's one hating I'm on top of. Do you have any recommendations for pension providers?
    • MallyGirl
    • By MallyGirl 21st Oct 19, 5:08 PM
    • 4,026 Posts
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    MallyGirl
    once you have done a bit of reading about the fundamentals then a quick search on stakeholder pension providers is probably the best plan.
    If you become more knowledgeable in the future you could always transfer at that point but, for now, something is better than nothing.
    • pkpk
    • By pkpk 21st Oct 19, 5:11 PM
    • 50 Posts
    • 3 Thanks
    pkpk
    There only seems a few Stakeholder providers but there are 40 funds to choose from. Is there any benefit to choosing Stakeholder over a SIP?

    Hargreaves Landsdown and Fidelity only offer SIP's from what I can see.
    • xylophone
    • By xylophone 21st Oct 19, 5:42 PM
    • 31,594 Posts
    • 19,591 Thanks
    xylophone
    If you don't have a great deal of experience, the simple option would be a start - you could then do your research?

    You also have the option of a personal pension. Example

    https://www.cavendishonline.co.uk/personal-pensions

    https://moneytothemasses.com/saving-for-your-future/pensions/the-best-cheapest-sipps-low-cost-diy-pensions

    https://monevator.com/find-the-best-online-broker/

    https://monevator.com/index-investing-guide/
    • pkpk
    • By pkpk 21st Oct 19, 5:46 PM
    • 50 Posts
    • 3 Thanks
    pkpk
    Thanks a lot. The more I read the more options and subsequent confusion.

    The Stakeholder option seems a good way to start and if I put some regular time aside it seems I can transfer out once I know what I'm doing a little more.

    A quick look at the Avivia Stakholder (looks to be chaper when bought through Cavndish) offers 40 funds! Seems over complicated for the simple option. Where would you start in narrowing these down?
    • xylophone
    • By xylophone 21st Oct 19, 6:28 PM
    • 31,594 Posts
    • 19,591 Thanks
    xylophone
    Have you read the stakeholder fund guide available here?

    http://www.aviva-for-advisers.co.uk/adviser/site/public/products/individual-pensions/stakeholder-pension
    • pkpk
    • By pkpk 21st Oct 19, 7:42 PM
    • 50 Posts
    • 3 Thanks
    pkpk
    Yeah its completely mind boggling. The risk section doesn't have a key as which is high or low and in layman's terms the terminology is another language.
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