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  • FIRST POST
    • MrsWenger
    • By MrsWenger 10th Feb 19, 1:12 PM
    • 283Posts
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    MrsWenger
    S&S ISA Option- please comment on my thoughts
    • #1
    • 10th Feb 19, 1:12 PM
    S&S ISA Option- please comment on my thoughts 10th Feb 19 at 1:12 PM
    Hi, apologies for the lengthy post but I would be grateful for your views on an option I am considering please.

    We still have 2 joint Santander 123 accounts with the maximum value in them. I am considering putting £10,000 each into a S&S ISA and switching one of the accounts to NatWest for the £150 offer.

    We are aged 54 and 52 and are both higher rate tax payers. We have a number of the current accounts which pay interest and regular saver accounts with HSBC, First Direct, Lloyds, Nationwide and Santander. We pay the maximum amounts into each of these every month but some of the money comes from the current accounts; it is not all from salary.

    We have cash ISAs with Nationwide and have £10,000 left of this years allowance to deposit.

    We have just over £9,000 left on our mortgage which ends in 2021.

    My partner has a NHS pension which has been active for 34 years, my pension arrangements are poor, I have a workplace pension where I match the company contribution of 5% each month.

    We don’t currently have any investments other than a scheme through my employer where I contribute salary and this buys shares in the company with a 5% discount at the end of each quarter. This is administered by Fidelity.

    I feel that the Vanguard LifeStrategy 60 could be a suitable option for us but having read a lot of posts here and elsewhere, I can see there are other options from other companies.

    Can anyone suggest which other options to consider and which platform to consider please? Given our current way of saving, should we consider starting with the £10,000 each and then add an amount in each month during the next ISA year or just add the £10,000 as a one-off deposit?

    In our position should we consider something different altogether?
    Last edited by MrsWenger; 10-02-2019 at 2:06 PM. Reason: Word change, fee to deposit
Page 1
    • Alexland
    • By Alexland 10th Feb 19, 1:45 PM
    • 4,501 Posts
    • 3,846 Thanks
    Alexland
    • #2
    • 10th Feb 19, 1:45 PM
    • #2
    • 10th Feb 19, 1:45 PM
    If you are paying higher rate tax have you considered increasing your contribution into pension(s) to get down to basic rate tax? Is your partner's pension so big they may have lifetime allowance issues?

    Pensions are likely to be more beneficial than S&S ISAs although yes VLS60 on Vanguard Investor is a good choice but it depends on circumstances and objectives.

    Alex
    • Zorillo
    • By Zorillo 10th Feb 19, 2:09 PM
    • 481 Posts
    • 313 Thanks
    Zorillo
    • #3
    • 10th Feb 19, 2:09 PM
    • #3
    • 10th Feb 19, 2:09 PM
    I'd also consider sacrificing much more of your own salary into a pension and cutting back on regular savers.

    But if you're happy with how you're doing things then I think VLS60 would be as good as anything.
    • MrsWenger
    • By MrsWenger 10th Feb 19, 2:33 PM
    • 283 Posts
    • 118 Thanks
    MrsWenger
    • #4
    • 10th Feb 19, 2:33 PM
    • #4
    • 10th Feb 19, 2:33 PM
    Thank you for you reply Alex.

    I hadn’t considered that with my pension, my partner cannot make extra contributions. Does this option depend on either the scheme or my employer allowing me to do that or can I just decide to do it?

    Should I consider paying in an increased level and using the £20,000 in the Santander account for the items my salary would be used for?

    No chance of my partner being anywhere near the lifetime allowance, she earns around £49,000 and I earn slightly more. I have a company car and healthcare too.

    As naive as this may sound, we are not sure what to do for the best but just feel that we should do something to make our money work better for us.

    My partner would like to take her pension at 55 but this thought is based on feedback from colleagues who have done the same thing rather than anything else. She would expect to work in some capacity after this.

    I have not yet decided what age I would like to retire at.

    We would have no issue with talking to an IFA but we don’t know of any recommendations local to us, another challenge!

    Thank you for the feedback on the Vanguard topic.
    • MrsWenger
    • By MrsWenger 10th Feb 19, 2:47 PM
    • 283 Posts
    • 118 Thanks
    MrsWenger
    • #5
    • 10th Feb 19, 2:47 PM
    • #5
    • 10th Feb 19, 2:47 PM
    Thank you for your reply Zorillo.

    Happy to investigate all options? As per my reply to Alex’s post, we just feel we could make what money we have work better for us.
    • masonic
    • By masonic 10th Feb 19, 3:31 PM
    • 11,070 Posts
    • 8,578 Thanks
    masonic
    • #6
    • 10th Feb 19, 3:31 PM
    • #6
    • 10th Feb 19, 3:31 PM
    I hadn’t considered that with my pension, my partner cannot make extra contributions. Does this option depend on either the scheme or my employer allowing me to do that or can I just decide to do it?
    Originally posted by MrsWenger
    You could increase contributions made through your scheme (which is the best option if salary sacrifice is available), or take out a separate personal pension or SIPP for the extra contributions. Your partner is certainly at liberty to start an additional pension, even though her workplace scheme doesn't allow additional contributions. If I were in your position I'd consider upping my contributions significantly, keeping an eye on the LTA.

    My partner would like to take her pension at 55 but this thought is based on feedback from colleagues who have done the same thing rather than anything else. She would expect to work in some capacity after this.
    She might be better off leaving her existing pension in place if she intends to continue working. She could make use of a separate pension in the coming years and put that into drawdown at 55 rather than cash in the potentially more valuable benefits of her workplace scheme.

    We would have no issue with talking to an IFA but we don’t know of any recommendations local to us, another challenge!
    You can find a local IFA through https://www.unbiased.co.uk/
    It wouldn't hurt to identify 2-3 potential options and have an initial conversation. It seems like you could get plenty of value for money from someone who could look at your situation in detail.
    Last edited by masonic; 10-02-2019 at 3:38 PM.
    • MrsWenger
    • By MrsWenger 10th Feb 19, 4:23 PM
    • 283 Posts
    • 118 Thanks
    MrsWenger
    • #7
    • 10th Feb 19, 4:23 PM
    • #7
    • 10th Feb 19, 4:23 PM
    Thank you very much for your reply Masonic.

    I will investigate the pension option with work.

    Thank you for the link to look for local IFA.
    • jimjames
    • By jimjames 10th Feb 19, 4:30 PM
    • 13,082 Posts
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    jimjames
    • #8
    • 10th Feb 19, 4:30 PM
    • #8
    • 10th Feb 19, 4:30 PM
    If you're putting more into cash ISAs have you looked at other accounts instead? How does Marcus at 1.5% compare to your cash ISA?
    Remember the saying: if it looks too good to be true it almost certainly is.
    • MrsWenger
    • By MrsWenger 10th Feb 19, 4:36 PM
    • 283 Posts
    • 118 Thanks
    MrsWenger
    • #9
    • 10th Feb 19, 4:36 PM
    • #9
    • 10th Feb 19, 4:36 PM
    Hi Jimjames, the cash ISA rate is 1.4% so better than Marcus given we pay 40% tax on savings interest.
    With all of our money being in cash options I was keen to explore alternatives.

    I have been reading up on S&S ISA’s and the Vanguard products hence my original post. We feel we should broaden our horizons and explore what else is available but are not sure where to start.
    • MrsWenger
    • By MrsWenger 11th Feb 19, 1:14 PM
    • 283 Posts
    • 118 Thanks
    MrsWenger
    Hi everyone,

    I have established that my company pension does allow for salary sacrifice so that is good news.

    Can anyone advise how best to calculate what contribution I would need to make to move to the lower tax bracket please?

    I have looked at a few options online but they don’t cover all of the areas I imagine I need to take into account. These items include a £5,000 per annum bonus which is paid quarterly but not eligible for pension contribution and my company car.

    One other thing I have thought of is whether my death in service benefit will be reduced if I commit to salary sacrifice. I will ask Payroll about this. It is not a benefit I hope to take of course!

    Thanks again...
    • greenglide
    • By greenglide 11th Feb 19, 1:50 PM
    • 3,260 Posts
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    greenglide
    I would expect salary related benefits such as this to be based on the "reference salary" or whatever it is called in your scheme. This is the gross pay that you would have got if you sacrificed some of it.
    • jimjames
    • By jimjames 11th Feb 19, 1:53 PM
    • 13,082 Posts
    • 12,024 Thanks
    jimjames
    Hi Jimjames, the cash ISA rate is 1.4% so better than Marcus given we pay 40% tax on savings interest.
    With all of our money being in cash options I was keen to explore alternatives.

    I have been reading up on S&S ISAís and the Vanguard products hence my original post. We feel we should broaden our horizons and explore what else is available but are not sure where to start.
    Originally posted by MrsWenger
    Do you get more than £500 interest a year each? If so do you need so much cash or could that go into S&S ISAs? For long term money cash ISAs don't seem to make much sense to me.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • george4064
    • By george4064 11th Feb 19, 2:35 PM
    • 1,106 Posts
    • 1,126 Thanks
    george4064
    You can compare investment platforms here:
    https://monevator.com/compare-uk-cheapest-online-brokers/



    As always, consider the net total return (after tax) when considering where you stick your money, including in ISA wrapper or not.
    "If you arenít willing to own a stock for ten years, donít even think about owning it for ten minutesĒ Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £12,427.51/£12,000 (104%)
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    • MrsWenger
    • By MrsWenger 11th Feb 19, 5:19 PM
    • 283 Posts
    • 118 Thanks
    MrsWenger
    I would expect salary related benefits such as this to be based on the "reference salary" or whatever it is called in your scheme. This is the gross pay that you would have got if you sacrificed some of it.
    Originally posted by greenglide
    Thank you for your reply Greenslide. Iíll follow up with Payroll.
    • MrsWenger
    • By MrsWenger 11th Feb 19, 5:21 PM
    • 283 Posts
    • 118 Thanks
    MrsWenger
    Do you get more than £500 interest a year each? If so do you need so much cash or could that go into S&S ISAs? For long term money cash ISAs don't seem to make much sense to me.
    Originally posted by jimjames
    Yes we do Jimjames and we agree with you, hence my opening post in this thread about S&S ISAs
    • MrsWenger
    • By MrsWenger 11th Feb 19, 5:22 PM
    • 283 Posts
    • 118 Thanks
    MrsWenger
    You can compare investment platforms here:
    [URL]https://monevator.com/compare-uk-cheapest-online-broker

    As always, consider the net total return (after tax) when considering where you stick your money, including in ISA wrapper or not.
    Originally posted by george4064
    Thank you for your reply and for the link George4064.
    • Spiggle
    • By Spiggle 11th Feb 19, 5:42 PM
    • 1,751 Posts
    • 14,201 Thanks
    Spiggle
    I'm no good with all the calculating, pension, diversification parts of your OP MrsWenger but I'm a newbie/learning with the investing side, held all savings in various cash accounts, and am only a couple of years older than you. I have just opened a Vanguard VLS60 S&SISA for the same amount as you intend. It was painless to do and the people at the end of the phone have been hugely helpful. I do intend to leave this invested for at least 10 years.

    Do go with other knowledgeable opinions on the priority order for where you put your money though, it does appear that in circumstances such as yours, pension will be the first consideration.

    All the best,
    Spigs
    Mortgage Free October 2013
    • MrsWenger
    • By MrsWenger 11th Feb 19, 6:19 PM
    • 283 Posts
    • 118 Thanks
    MrsWenger
    Hi Spigs, thank you for your reply.

    That is very useful information, thank you. May I ask who you used to open it with please?

    I am definitely exploring pension options but I am still thinking that the £20k we have with Santander could go into a S&S ISA each. If we do it I would also look to leave it in for at least 10 years.

    I wish you the best of luck; perhaps we will touch base in 10 years time and both be very happy with the outcome!
    • Zorillo
    • By Zorillo 11th Feb 19, 9:24 PM
    • 481 Posts
    • 313 Thanks
    Zorillo
    The £20k could also go into your pension, you'd get tax relief on it, and you could get it back out again in a few years and then put it in an ISA.
    • Spiggle
    • By Spiggle 12th Feb 19, 9:57 AM
    • 1,751 Posts
    • 14,201 Thanks
    Spiggle
    Hi Spigs, thank you for your reply.

    That is very useful information, thank you. May I ask who you used to open it with please?

    I am definitely exploring pension options but I am still thinking that the £20k we have with Santander could go into a S&S ISA each. If we do it I would also look to leave it in for at least 10 years.

    I wish you the best of luck; perhaps we will touch base in 10 years time and both be very happy with the outcome!
    Originally posted by MrsWenger
    Hi MrsWenger,

    I just went direct to Vanguard and purchased on their platform. The other knowledgeable people will be able to deal with complicated investments but I wanted easy, simple and relatively cheap. The service I've had so far from Vanguard may not be expensive, they are very helpful on their telephone line and it is to some extent a 'fire and forget' investment for me.

    The restriction with Vanguard is of course that you can only invest/they only offer Vanguard investments whilst the VLS range may be purchased elsewhere albeit at possibly higher cost. There are of course other multi-asset funds available, I think there's an HSBC Global Fund as well as others but please look to the others for opinions on those.

    I wish you luck with your decision and yes, I'll see you in ten years time to compare!

    All the best,
    Spigs
    Mortgage Free October 2013
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