Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Jimmyc
    • By Jimmyc 4th Aug 18, 9:24 AM
    • 149Posts
    • 37Thanks
    Jimmyc
    S and S Lisa
    • #1
    • 4th Aug 18, 9:24 AM
    S and S Lisa 4th Aug 18 at 9:24 AM
    Hi,

    Iím concidering opening up a S and S LISA to give me a nice lump sum of cash when I hit 60 To pay off my mortgage, have a nice holiday and if I have kids to help them out.

    Iím early 30ís and have maxed out my workplace pension.

    Iím looking to invest £50+ a month, increasing to £100 after a year.

    Im a bit nieve when it comes to investments to I tend to stick to cash investments.

    Question is, Iím not 100% sure how it works, so I pay in an amount each month, and that stays as cash until I invest it?
    Or can I pay straight into an investment fund? Do I pay a fee each month transferring that investment into cash?

    Was concidering AJ Bell is they seem to have the lowest feeís

    Thank you
Page 1
    • Alexland
    • By Alexland 4th Aug 18, 9:51 AM
    • 3,833 Posts
    • 3,139 Thanks
    Alexland
    • #2
    • 4th Aug 18, 9:51 AM
    • #2
    • 4th Aug 18, 9:51 AM
    I'm early 30's and have maxed out my workplace pension.
    Originally posted by Jimmyc
    What do you mean by that - that you are getting maximum employer matched contributions or you are putting enough in to avoid paying higher rate tax? Or maybe both? If you are still paying any higher rate tax then further pension contributions (assuming you haven't hit the pension annual allowance, etc) would beat a LISA.

    so I pay in an amount each month, and that stays as cash until I invest it?
    Or can I pay straight into an investment fund? Do I pay a fee each month transferring that investment into cash?
    Originally posted by Jimmyc
    Depends on the provider; companies like Nutmeg, Share Centre and Moneybox will do all this for you automatically however my view is that DIY platforms such as HL and AJ Bell offer a better value and financial stability proposition for LISAs. It's more work as you add money and invest the contribution/bonuses manually and keep an eye on the cash balance to pay the periodic platform fees.

    The quality of service from both HL and AJ Bell are about the same (pretty average in my experience) so it is really just down to what they will cost you which depends on your contribution profile (regular or lump sum), account balance and investment choices.

    Was concidering AJ Bell is they seem to have the lowest fee's
    Originally posted by Jimmyc
    Remember that AJ Bell charge £1.50 per fund trade so are expensive for your small amounts. You would probably be better with HL (as although their percentage platform fee is higher they have no fund trade fees) investing in something like their discounted Blackrock Consensus 85 which is a mostly passive global equities/bond fund. You won't find a mixed asset fund with such a low percentage charge on AJ Bell.

    https://www.hl.co.uk/investment-services/lifetime-isa

    https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/b/blackrock-consensus-85-class-i-accumulation

    Remember with stock market investments to expect the value to go up and down but the long term average over the past few hundred years has been up. Still there will be periods when you are down and you will have to sit tight and not make the behavioral error to sell low. I find this article helpful:

    https://www.nutmeg.com/nutmegonomics/increasing-your-chances-of-positive-portfolio-returns-the-facts-about-long-term-investing/

    As you get closer to withdrawal it is likely you will want to gradually move into a lower volatility fund to reduce the risk of being impacted if the stock markets are low if you want to withdraw at 60.

    Alex.
    Last edited by Alexland; 04-08-2018 at 10:32 AM. Reason: Added nutmeg article
    • Jimmyc
    • By Jimmyc 5th Aug 18, 11:26 AM
    • 149 Posts
    • 37 Thanks
    Jimmyc
    • #3
    • 5th Aug 18, 11:26 AM
    • #3
    • 5th Aug 18, 11:26 AM
    Thank you for your reply.

    Im maxing out employer contributions, I!m doing 5% they are matching with 10%.

    I dont expect to retire until 65+ and would like a lump some of money a few years before retirement, I would have ideally liked at 50/55 but if I choice a LISA then I get the 25% bonus.

    That was my concern, I know £50 is low and didnt want it been chipped away by fees

    I will look into the option from HL as that makes more sense.

    The link to nutmeg was quite interesting and a good read. Ive had sharesaves before but never really invested in anything else.
    Last edited by Jimmyc; 05-08-2018 at 11:29 AM.
    • Alexland
    • By Alexland 5th Aug 18, 1:00 PM
    • 3,833 Posts
    • 3,139 Thanks
    Alexland
    • #4
    • 5th Aug 18, 1:00 PM
    • #4
    • 5th Aug 18, 1:00 PM
    If you are still paying any higher rate tax then it's worth considering increasing your employee contribution above 5% (even if you get no further employer matching) in preference to a LISA.

    Also for someone in basic rate whose employer enables salary sacrifice NI savings then additional pension contributions give roughly similar benefit to a LISA.

    Good luck
    Alex
    • Jimmyc
    • By Jimmyc 7th Aug 18, 9:10 PM
    • 149 Posts
    • 37 Thanks
    Jimmyc
    • #5
    • 7th Aug 18, 9:10 PM
    • #5
    • 7th Aug 18, 9:10 PM
    I!!!8217;m a basic tax payer and expect to be for a while.

    I know nobody can give me an answer to where to invest, but is there any guide to where to put my ongoing investment? I didn!!!8217;t realise there would be that many funds? How do people make there decision? My decision would be a complete punt !!!55358;!!!56614;!!!8205;!!!9794;!!!65039;
    • Alexland
    • By Alexland 7th Aug 18, 10:08 PM
    • 3,833 Posts
    • 3,139 Thanks
    Alexland
    • #6
    • 7th Aug 18, 10:08 PM
    • #6
    • 7th Aug 18, 10:08 PM
    In which case you would be best going for something fairly passive like the Blackrock Consensus 85 that I suggested above. Such a fund should capture most of the market returns at a low cost.

    People make their decisions based on advertising, research, word of mouth and talking about it endlessly on internet forums...

    Alex
    • Jimmyc
    • By Jimmyc 7th Aug 18, 11:17 PM
    • 149 Posts
    • 37 Thanks
    Jimmyc
    • #7
    • 7th Aug 18, 11:17 PM
    • #7
    • 7th Aug 18, 11:17 PM
    Thank you for your reply.

    Am I best putting the whole fund into the one account or is it best to split over 2? I know £50 a month is a very small amount, but will be £100/£150 in a year once I!!!8217;ve moved and got a few things sorted
    • Alexland
    • By Alexland 8th Aug 18, 6:19 AM
    • 3,833 Posts
    • 3,139 Thanks
    Alexland
    • #8
    • 8th Aug 18, 6:19 AM
    • #8
    • 8th Aug 18, 6:19 AM
    You are only allowed to contribute to one LISA account in each tax year. You get FSCS protection up to £50k but that's going up to £85k from next tax year. Obviously the protection doesn't cover the investments going up and down. 1 well diversified fund choice should be fine for low amounts.

    Alex
    • Jimmyc
    • By Jimmyc 12th Aug 18, 8:00 PM
    • 149 Posts
    • 37 Thanks
    Jimmyc
    • #9
    • 12th Aug 18, 8:00 PM
    • #9
    • 12th Aug 18, 8:00 PM
    I probably worded my last question wrong, I meant fund not account. Will stick with HL but wasnt sure if its worth splitting over 2 funds to minimise risk but think youve answered that.
    Thanks again, account opened and funded.
    • Jimmyc
    • By Jimmyc 12th Sep 18, 11:52 AM
    • 149 Posts
    • 37 Thanks
    Jimmyc
    due to reevaluating all my outgoings and a small pay rise Iím now in a position to save around £200 per month (£300 after Xmas)
    So similar question again all in the one fund or split? I wouldnít mind maybe going a bit higher risk with quarter or half, maybe one that pays monthly dividends instead off 6 monthly.
    • Linton
    • By Linton 12th Sep 18, 12:06 PM
    • 10,076 Posts
    • 10,410 Thanks
    Linton
    due to reevaluating all my outgoings and a small pay rise Iím now in a position to save around £200 per month (£300 after Xmas)
    So similar question again all in the one fund or split? I wouldnít mind maybe going a bit higher risk with quarter or half, maybe one that pays monthly dividends instead off 6 monthly.
    Originally posted by Jimmyc

    One broadly based fund like the Blackrock one mentioned previously is fine when you only have a very small portfolio. Once you get to say £20K you may want to look at additional funds.


    Though whilst you are dealing with non life-changing amounts of money there is nothing wrong with gaining experience by investing a % in additional different funds.
    • EJS_Superted
    • By EJS_Superted 12th Sep 18, 2:01 PM
    • 80 Posts
    • 54 Thanks
    EJS_Superted
    maybe one that pays monthly dividends instead off 6 monthly.
    Originally posted by Jimmyc

    This would be more relevant to somebody who is going to be withdrawing the income, for example, somebody retired who is living off their investments.

    At your stage in life most people simply use their investment income to buy more investments so the frequency of the dividends doesn't really matter. For this reason most people choose accumulation funds rather than income funds. If you haven't heard of income and accumulation units you should read about the difference before you buy any investments.
    • ColdIron
    • By ColdIron 12th Sep 18, 2:48 PM
    • 4,847 Posts
    • 6,420 Thanks
    ColdIron
    maybe one that pays monthly dividends instead off 6 monthly.
    Originally posted by Jimmyc
    What do you hope to achieve by this?

    At your age you are looking for growth or total return not income and frequent income doesn't advantage you in any way that I can think of
    • Jimmyc
    • By Jimmyc 13th Oct 18, 7:39 PM
    • 149 Posts
    • 37 Thanks
    Jimmyc
    Thank you for your reply’s sorry it’s taken so long to respond, I’ve read what I wrote and I missed half the information and didn’t explain my aim.
    I have about 8k at the minute in premium bonds (£100 winnings in past 6 months, years ago when rates were higher I usually out performed savings)
    I have a similar amount in my isa although I’m about to spend part of it.
    There is nothing for the forseeable future I will spend that on.
    The LISA plan is for retirement 60/65 whenever what may be.
    I generally put 100-200 in my isa each month, I don’t know how long I will be able to commit that amount for.

    My delema is do I leave my money in my isa earning below inflation, leave my premium bonds getting me the odd £25 every other month or move both or just the isa into stocks and shares, my gut tells me move the cash isa over to start with.

    I’ve already openned a stocks and shares but haven’t done anything, do I invest in the same fund as my LISA?

    I’ve thought about taking a chunk of my mortgage but my rate is 1.95% fixed for 5, hoping my investment would be better then paying off a chunk.

    Seems not a bad time to make the decision due to what happened in the market last week.

    I guess monthly dividends was because I was thinking long term but I guess it’s not important whilst fund would be low.

    Thank you again
    • Alexland
    • By Alexland 14th Oct 18, 10:07 AM
    • 3,833 Posts
    • 3,139 Thanks
    Alexland
    Make your decisions in sequence.

    Hold enough in accessable emergency cash to cover any period in which your normal income may be unavailable or your expenditure may be higher than normal (or both) this is a judgement on your outgoings, employability, etc.

    Hold cash for any expenditure planned in the next 5 years which you do not plan to fund from future income.

    Then for the rest of your money determine what may be needed in the medium/long term (S&S ISA) and what can be put away for retirement (LISA and pensions).

    Only once you have made these allocations then start to decide what providers and funds to use.

    Alex
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

251Posts Today

1,766Users online

Martin's Twitter
  • The responses to this thread are no question the best of british! https://t.co/jv5Q2ErQQC

  • RT @SMinihane87: @MartinSLewis After she received the title she addressed it in literally the first episode of the next season of the appre?

  • RT @WhichUK: ??CHRISTMAS WARNING TO PARENTS?? Don't buy any of these slimes for your kids ? they all contain potentially unsafe levels of?

  • Follow Martin