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@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • PixieFace
    • By PixieFace 12th Aug 18, 11:53 AM
    • 48Posts
    • 59Thanks
    PixieFace
    Confused About Investment Choices
    • #1
    • 12th Aug 18, 11:53 AM
    Confused About Investment Choices 12th Aug 18 at 11:53 AM
    Hi All,

    I am looking at starting to invest and have been reading many articles and the threads on the forums for some weeks now and find that I am not making much progress in terms of what I should do; indeed, I find I am more and more confused. I have a good amount in cash savings, a LISA (for retirement saving) which is full to date, and make reasonable contributions to my company pension. I am starting to think that I should begin investing as a way of making my money work harder for me, but I am pretty risk-averse and really don't know where to begin. I have been looking into passive investing using an ISA but this still seems really complex and the more I research, the more I am shying away from the idea and thinking I will continue to save in cash and just accept that I will lose out to inflation. I was thinking of an initial lump sum investment of 1,000 with regular deposits of around 100 a month to begin with, so not sufficient sums to justify the services of an IFA. My initial thought for the ISA is to go with Cavendish due to the small investment amount and their low fees, but I don't know where to even begin with choosing funds or the best approach to using the ISA. I am not averse to the idea of spending a bit of time on managing the ISA, as I already do so to manage bank accounts and savings, but I lack the knowledge and experience to feel comfortable enough to begin. Any advice would be most welcome
Page 1
    • ColdIron
    • By ColdIron 12th Aug 18, 12:00 PM
    • 4,846 Posts
    • 6,420 Thanks
    ColdIron
    • #2
    • 12th Aug 18, 12:00 PM
    • #2
    • 12th Aug 18, 12:00 PM
    You could do worse than to research one of Vanguard's Lifestrategy funds held in an ISA with Vanguard Investor. Other products and vendors are available but this is as simple as it gets on 1,000
    • NoMore
    • By NoMore 12th Aug 18, 12:02 PM
    • 253 Posts
    • 227 Thanks
    NoMore
    • #3
    • 12th Aug 18, 12:02 PM
    • #3
    • 12th Aug 18, 12:02 PM
    http://monevator.com/vanguard-lifestrategy/

    and there's a good explanation of ColdIron's recommendation
    • NewShadow
    • By NewShadow 12th Aug 18, 6:12 PM
    • 3,361 Posts
    • 14,505 Thanks
    NewShadow
    • #4
    • 12th Aug 18, 6:12 PM
    • #4
    • 12th Aug 18, 6:12 PM
    Hi All,

    I am looking at starting to invest and have been reading many articles and the threads on the forums for some weeks now and find that I am not making much progress in terms of what I should do; indeed, I find I am more and more confused.
    Originally posted by PixieFace
    Hi Pixie.

    I was - and in many ways still am - in the same situation as you are until, really, the start of this FY

    I found it very helpful to set a goal - for me, I want enough money to buy a house with a 26% deposit in the next 10 years or so (so I have enough time to pay off the mortgage before I'm 65)

    I don't intend to buy the house any time soon, and if I get my finger out and all goes well I can have the cash by this time next year, but it's a goal to work towards.

    You have a lisa towards your retirement and are paying into your pension - so is your goal having a specific amount of annual income once you are retired?

    Or perhaps, given you can take the LISA from 60, to retire early and have enough assets to provide an income until your work and state pension kick in?

    Or are these savings separate from your retirement and you want to take an exotic holiday, or carry out building works, or something else?

    I found, once I knew what I wanted to do with the money, it helped me know how much I wanted and that helped me figure out the best way to get there.

    But that's just me and you might be different
    Last edited by NewShadow; 12-08-2018 at 6:14 PM.
    That sounds like a classic case of premature extrapolation.

    House deposit: 26% = 26,000 + 800pm * 9 months = 33,000

    Goal: Keep the bigger picture in mind...
    • Zorillo
    • By Zorillo 12th Aug 18, 6:23 PM
    • 430 Posts
    • 282 Thanks
    Zorillo
    • #5
    • 12th Aug 18, 6:23 PM
    • #5
    • 12th Aug 18, 6:23 PM
    If your LISA is in cash, but for retirement, you should consider moving it to S&S as soon as possible. It'll be invested for a minimum of 19 years (more if you're younger than 40).

    Mine is invested in Vanguard Lifestrategy through AJ Bell who work out cheaper for me as I only make two trades per year (investing the deposit and then the bonus). I'm 35, so 25 years until 'redemption' so it's currently in VLS100 for the next ten years at least, but once it's bigger I'll shift it down the risk levels. As you've said your cautious, you might consider a lower risk version (40 or 60 perhaps, or even 20 until you get a feel for it?).
    Last edited by Zorillo; 12-08-2018 at 6:34 PM.
    • Alexland
    • By Alexland 12th Aug 18, 7:12 PM
    • 3,829 Posts
    • 3,130 Thanks
    Alexland
    • #6
    • 12th Aug 18, 7:12 PM
    • #6
    • 12th Aug 18, 7:12 PM
    +1 for moving your LISA to S&S as saving in cash is higher risk of losing to inflation over the long term.
    • TheShape
    • By TheShape 12th Aug 18, 7:47 PM
    • 1,425 Posts
    • 1,299 Thanks
    TheShape
    • #7
    • 12th Aug 18, 7:47 PM
    • #7
    • 12th Aug 18, 7:47 PM
    Hi All,I am looking at starting to invest and have been reading many articles and the threads on the forums for some weeks now and find that I am not making much progress in terms of what I should do; indeed, I find I am more and more confused. I have a good amount in cash savings, a LISA (for retirement saving) which is full to date, and make reasonable contributions to my company pension.
    Originally posted by PixieFace
    If you are making contributions to a pension you should already be investing and if your LISA isn't invested for retirement then, as already mentioned, it should be.

    I'd look at where your pension is invested and whether you are receiving as large an employer contribution as you can as well as whether you can use salary sacrifice in your pension.

    I think it's worth posting details of these as well as your cash savings, age, aims for the money etc.

    You'll often find that if you post a good deal of detail then the people here will pick up on things that you might have overlooked and give some good suggestions.
    • BLB53
    • By BLB53 12th Aug 18, 8:55 PM
    • 1,433 Posts
    • 1,259 Thanks
    BLB53
    • #8
    • 12th Aug 18, 8:55 PM
    • #8
    • 12th Aug 18, 8:55 PM
    My initial thought for the ISA is to go with Cavendish due to the small investment amount and their low fees, but I don't know where to even begin with choosing funds or the best approach to using the ISA. I am not averse to the idea of spending a bit of time on managing the ISA, as I already do so to manage bank accounts and savings, but I lack the knowledge and experience to feel comfortable enough to begin
    It does not need to be complicated. Just go with Vanguard Lifestrategy and select the most appropriate equity/bond ratio to match your level of risk...maybe VLS 40 or 60..and drip feed your monthly contributions for the long term.

    Here is good article on DIY Investor who follows this fund
    http://diyinvestoruk.blogspot.com/2015/04/vanguard-lifestrategy-one-stop-solution.html

    As mentioned above, the Vanguard platform would be the best option if you decide to go with the Lifestrategy as it has the lowest annual charges and there are no transaction charges for each monthly purchase.
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • PixieFace
    • By PixieFace 14th Aug 18, 12:44 PM
    • 48 Posts
    • 59 Thanks
    PixieFace
    • #9
    • 14th Aug 18, 12:44 PM
    • #9
    • 14th Aug 18, 12:44 PM
    Thank you all for your responses. ColdIron, NoMore and BLB53, thank you for suggesting the Vanguard Lifestrategy options, I will have a look at these in more detail, but it looks like a good starting point for me. I think I had not considered this as there are fewer funds available through Vanguard than with other options, although less choice is not always a bad thing!!

    My LISA is a cash version at the moment but Zorillo and Alexland you make a valid point regarding the length of the investment. I wasn't even considering the idea of investing when I opened the LISA but will look at transferring this once I am a little more confident with the options.

    NewShadow, I don't really have a goal, as such, but I know what you mean. I am mainly looking at this from the perspective of ensuring I have enough for retirement, but with a view of retiring earlier if I can, so I suppose that is the main aim. I am also considering the fact that my retirement savings are tied up until a certain age, so having something else that is accessible sooner, which is tax efficient and providing better growth/income potential than cash savings makes sense. I also have the issue of running out of direct debit options so am restricted on the higher interest current account options. Although I think monthly deposits to a Vanguard LISA may be an additional DD option for me so I can re-visit my current account options too

    The Shape, I am happy with my current pension situation, which is salary sacrifice and has a good employer contribution, plus I pay into a previous company pension to retain the really low management fee and giving me an extra monthly direct debit for current accounts paying interest!. I don't really want to pay more into these due to age constraints on withdrawing and the tax implications, hence looking at ISAs.
    • Alexland
    • By Alexland 14th Aug 18, 1:26 PM
    • 3,829 Posts
    • 3,130 Thanks
    Alexland
    My LISA is a cash version at the moment but Zorillo and Alexland you make a valid point regarding the length of the investment. I wasn't even considering the idea of investing when I opened the LISA but will look at transferring this once I am a little more confident with the options.
    Originally posted by PixieFace
    A 'good enough' low cost mostly passive S&S investment will be better than saving for 20+ years in cash. If you go with HL or AJ Bell YouInvest and invest in one of the low cost global passive funds such as Blackrock Consensus 85 (discounted on HL), Vanguard LifeStrategy 80 or HSBC Global Strategy Dynamic your money should grow nicely - with a few ups and downs along the way. As you get closer to withdrawal at 60 (or later if you won't need the money immediately) you might want to gradually move the money into a more balanced fund.

    If you want a smoother ride (for probably lower returns but still likely better than cash) consider Vanguard LifeStrategy 60 or HSBC Global Strategy Balanced funds.

    Edit: just remembered HL don't accept inbound LISA transfers so look at AJ Bell YouInvest.

    Alex
    Last edited by Alexland; 14-08-2018 at 1:42 PM.
    • PixieFace
    • By PixieFace 14th Aug 18, 1:43 PM
    • 48 Posts
    • 59 Thanks
    PixieFace
    Thanks Alex, I will look into these.
    • PixieFace
    • By PixieFace 14th Aug 18, 2:20 PM
    • 48 Posts
    • 59 Thanks
    PixieFace
    A further confusion I have is regarding which platforms to use. If I am reading the above comments correctly, I should invest in the Vanguard Lifestrategy Fund via Vanguard Investor, but the LISA with Vanguard (or A.N.Other) via AJ Bell YouInvest. Is that because Vanguard does not offer a LISA?
    • TheShape
    • By TheShape 14th Aug 18, 2:27 PM
    • 1,425 Posts
    • 1,299 Thanks
    TheShape
    A further confusion I have is regarding which platforms to use. If I am reading the above comments correctly, I should invest in the Vanguard Lifestrategy Fund via Vanguard Investor, but the LISA with Vanguard (or A.N.Other) via AJ Bell YouInvest. Is that because Vanguard does not offer a LISA?
    Originally posted by PixieFace
    That's correct, Vanguard do not offer a LISA.
    • henryandmay
    • By henryandmay 14th Aug 18, 3:24 PM
    • 50 Posts
    • 8 Thanks
    henryandmay
    Is a LISA wrapper worth investing in via a S&S ISA.
    25% bonus just seems to good to be true or am I missing something.
    I'm 35 so would be looking saving for retirement.
    • eskbanker
    • By eskbanker 14th Aug 18, 3:48 PM
    • 8,743 Posts
    • 10,002 Thanks
    eskbanker
    Is a LISA wrapper worth investing in via a S&S ISA.
    25% bonus just seems to good to be true or am I missing something.
    I'm 35 so would be looking saving for retirement.
    Originally posted by henryandmay
    The 25% bonus is generally worth having, for anyone who's prepared to tie the money up long-term (no penalty-free withdrawal until 60 unless buying first property) and accept the small annual contribution limit of 4K (versus 20K for all other non-HTB ISAs).

    LISA is technically a different type of ISA from a S&S ISA but comes in both cash and S&S forms (i.e. there's a difference between a S&S ISA and a S&S LISA), but S&S is undoubtedly better than cash for long-term holders.
    • henryandmay
    • By henryandmay 14th Aug 18, 4:04 PM
    • 50 Posts
    • 8 Thanks
    henryandmay
    The 25% bonus is generally worth having, for anyone who's prepared to tie the money up long-term (no penalty-free withdrawal until 60 unless buying first property) and accept the small annual contribution limit of 4K (versus 20K for all other non-HTB ISAs).

    LISA is technically a different type of ISA from a S&S ISA but comes in both cash and S&S forms (i.e. there's a difference between a S&S ISA and a S&S LISA), but S&S is undoubtedly better than cash for long-term holders.
    Originally posted by eskbanker
    Thanks Eskbanker.
    Can you hold a S&S LISA and a regular S&S isa at same time?
    • eskbanker
    • By eskbanker 14th Aug 18, 4:09 PM
    • 8,743 Posts
    • 10,002 Thanks
    eskbanker
    Thanks Eskbanker.
    Can you hold a S&S LISA and a regular S&S isa at same time?
    Originally posted by henryandmay
    Yes, the rule is that it's only allowed to pay new money into one ISA of each type in any given tax year, so because S&S ISA and LISA are different types, it's permitted to pay into both.
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

954Posts Today

6,623Users online

Martin's Twitter
  • Today's Twitter poll: On Brexit, which is more important to you right now certainty or outcome. Ie would you prefe? https://t.co/En38QfRh3o

  • Many saying sexism or ego. My suspicion as someone who works in TV is that this is a format point. I'd think whe? https://t.co/AXfrv5YqKA

  • I do always ponder when watching apprentice why Lord Sugar is "Lord Sugar" but Baroness Bradey is Karen. #bbctheapprentice

  • Follow Martin