Advice for strategic investment ISA opening and future S&S learning

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sop12hw
sop12hw Posts: 14 Forumite
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edited 3 June 2020 at 1:02AM in ISAs & tax-free savings
:):):):)

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  • Alexland
    Alexland Posts: 9,653 Forumite
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    edited 6 September 2019 at 3:34PM
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    maxed my employer's pension contributions
    Are you making a high enough employee contribution to avoid higher rate tax on your salary, allowances, overtime, taxable benefits, bonus, etc? Does the total level of pension (and future S&S LISA) contribution with modest growth above inflation and fees support your planned retirement date and income profile? If not it may be worth contributing more into the pension?
    open a Lifetime S&S ISA to continue saving for when I'm 60 - probably with Nutmeg for the ethical investing option
    Reassess the options when you are ready but Nutmeg are currently a loss making business and there is no cap on their fees (unlike HL and AJ Bell if you later switch from funds to ETFs) so would get expensive after a few years of contributions.
    I need to open this ISA during this tax year if given that my plans are to open a Lifetime S&S ISA next tax year
    I don't understand this comment - you are fine to open and contribute to both a S&S ISA and a S&S LISA in the same tax year (as they are different types of ISA) up to the £4k LISA and overall £20k ISA limits.
    I have read about IFISAs and SIPP as well, but I don't know much about these.
    These accounts are not necessary for now especially if your employer offers a good pension scheme.
    Please can anyone give a view about whether Cavendish or Vanguard are good platforms for my £100+ monthly investment into a S&S ISA?
    If you want to do this at high risk (eg 100% equities) it doesn't really make much difference. Vanguard have lower 0.15% platform fee but their global trackers are around 0.24% and Cavendish have a higher 0.25% platform fee but give you access to global tracker funds as low as 0.12%. I suggest you consider what the money in this S&S ISA will be used for as that might influence your desired volatility and fund choice. Cavendish would give access to various ethically filtered options.

    Alex
  • sop12hw
    sop12hw Posts: 14 Forumite
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    Alexland - I've seen your answers on other threads well so thank you for your help on this and your general contributions. Rookie error - I didn't realise that s&s isas could be opened in the same tax year as lifetime s&s isas so that may change things(!)

    I will take on board what you've said about Nutmeg when looking into Lifetime ISAs next year, and very helpful points about Cavendish/Vanguard. I'm not a higher rate tax payer and I don't get overtime/bonuses sadly, so I think Lifetime isa is probably the best option for me... but I think I will consider speaking to a financial advisor next year to double-check this and the long-term pension maths. Very grateful for your help.
  • ColdIron
    ColdIron Posts: 9,049 Forumite
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    At this level a financial advisor is unlikely to be interested and even if they are will likely be uneconomic for you. I'd agree with Alex that contributing more to your pension is worth reassessing if it is a good one. LISAs can be accessed at 60 and by the time you get there pensions won't be much different. Your company pension is very likely to have caps on charges and can often negotiate discounts. Can you contribute via salary sacrifice? I would avoid IFISAs completely, they are not suitable for retirement planning

    You can never learn too much about investing and even if you don't construct a bespoke portfolio it is reassuring to know what's what. Other than that it seems a sensible enough plan for now
  • Alexland
    Alexland Posts: 9,653 Forumite
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    Although you have a good mortgage deposit it is worth considering how your LTV will affect the interest rate you get offered. It would be annoying to have made higher pension contributions only to be a few thousand short on getting a better mortgage interest rate. Still you won't know the property price for certain until the transaction occurs.

    Alex
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