Advice on my plans please

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  • kerrjp
    kerrjp Posts: 35
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    Hi Alexland,

    Thanks for the info, I have just initiated a transfer of one of my Nutmeg ISA's to vanguards own S/S ISA, my nutmeg ISA i am transferring was a risk level 7/10 I think Nutmeg changed their scale of risk from 1 of 5 to 1 of 10 a while ago. I am moving it into the Life strategy 80 (so 80/20 split between Equities and Bonds). I think i will leave the other ISA with nutmeg however I would need to decide how to split funding them monthly (whether to put the same in each a month or more in Vanguard than nutmeg or vice versa, might just stick with a 50:50 split in true hedge your bets style!).

    I will continue looking at pensions and look to start one by the end of the month, Nutmeg wanted 5k to open the pension which I do not have as a lump sum but I believe others such as the Aviva one do not have such a large minimum amount.

    Any other suggestions on good pension providers for my short list? I will be looking at paying more into pension through Ltd company and possibly paying some of what i had planned to put in ISA monthly as personal contribution to the pension so that I get some of the govt top up if that makes sense?

    Thanks again for everybody's help, feel like I have a solid plan forming :-)
  • Alexland
    Alexland Posts: 9,653
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    edited 17 October 2018 at 1:15PM
    Nutmeg's cheaper Fixed Allocation portfolios work on a scale of 1-5 but the more expensive Managed Portfolios work on a scale of 1-10. From what I can see they have not achieved outperformance with their Managed Portfolios so it seems a waste of money. The good news is you will be saving around 0.6% per annum on your platform fees. If you want to maintain a 7/10 you could consider allocating the money 50/50 between VLS60 and VLS80 but then you would need to remember to rebalance every so often.

    Yes the £5k minimum entry on the Nutmeg pension is crazy as they should be thankful for anyone that wants to do go with them. You won't have that problem with Aviva. If you wait a bit longer then Vanguard are supposed to be launching a SIPP before the end of this year but they haven't announced fees yet, it might be delayed and they might not have their systems in place from day one to accept company contributions.

    You won't get any government contribution on your S&S ISA and if the Pension contribution is recorded as from the company then you will have already saved corporation tax, income tax etc.

    Alex
  • kerrjp
    kerrjp Posts: 35
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    Hi Alexland,

    Thanks for the clarification, I have just instructed the transfer of my nutmeg ISA to the Vanguard lifestyle 80, in your opinion however would it be better for my wife to transfer her nutmeg ISA also to vanguard but to the VLS60 rather than keep hers with Nutmeg? (we treat our investments as collective but have the individual accounts to make use of our personal ISA allowances).

    I need to start the pension sooner rather than later so think the Vanguard one would be a bit late for me, however nothing to stop us opening up a pension in my wife's name as and when they launch if it is deemed a good product. On another note if I pay into my pension from the Ltd company is there any additional benefit into paying into two pensions (i.e. one for me one for my wife) or is paying just into mine good enough for now (I would have to split the amount 50:50 if going to both of us as otherwise I wouldn't have enough take home pay to both of us). Hope that makes some sense?

    Thanks
  • Alexland
    Alexland Posts: 9,653
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    It's up to you if you want to run your wife's ISA at a lower risk rating. In the long term her return would be expected to be lower but over the life of the investment she would see less volatility. From what I can see there is no good reason to stay with Nutmeg in any circumstances other than occasionally generous signup bonues.

    I think the others on the board might be better placed to comment on how HMRC would view the wife pension contribution as my experience is more in the area of investment. You might want to use a different provider for your pension(s) and ISAs anyway to avoid having all your eggs in one basket.

    Alex
  • Thrugelmir
    Thrugelmir Posts: 89,546
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    kerrjp wrote: »
    Current Mortgage - 420k (including 113k I have just re-mortgaged for to do a 2nd floor extension and ground floor re-layout) just fixed for 5 years @ 1.94% over 28 years

    Asked rhetorically.

    While contributing to the pension has obvious attractions. How comfortable are you with that level of debt. Given the remaining mortgage term left. You'll still have a balance of £360k in 5 years time. Every 1% rise adds £300 of monthly outgoing. Contracting can be extremely rewarding. Will your skills last out for another 23 years?
  • kerrjp
    kerrjp Posts: 35
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    Hi Thrugelmir,

    Thanks for your input, I agree with the concern regarding the debt, I am trying to balance the competing needs with the funds available. My intention is to overpay the mortgage as well as contributing to long term savings, I am hoping to pay from 500 - 1000 per month over-payment on the mortgage, I believe based on some of the input here I will put less in to our personal S/S ISA's and prioritise mortgage over-payments and pension contributions, whilst putting any residual saving into S/S ISA.

    I would be aiming to be reducing my mortgage balance by about 24k a year over the next years so hopefully have it down to about 300k which if all goes anywhere near to plan would leave me under 40% LTV. The debt is always a worry and i am determined to pay it down.

    Thanks
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