HL S&S ISA "safe" money

[was8v]

Hi, hope this makes sense.....I know not much.

Mum wants to downsize move house (like everyone else it seems). Her house is going up for sale.

Estate agents in the area she is looking are not entertaining views for anyone but cash buyers (!) Crazy time to buy a house but decision made.

She has the value to buy a bungalow in her S&S ISA in investments my dad chose before he died years ago. I was intending to move this all into Vanguard life strategy 80 for her but they have done so well and mum never seemed likely to need the money.....

I'm nervous the value of these investments will will drop at least temporarily with corona / brexit / tory leadership / whatever trump does next, they might rally or do nothing but I don't want to risk a temporary drop and miss out on a house.

Her house might sell first... but might not and in that case I will need to sell the funds and use the money. Not ideal as she won't be able to put the money back in to the S&S ISA (not flexible) but thats the housing market.

Anyway, she's likely to need to money. But might not so I don't want to take it out.

What's the safest place for the money within the S&S ISA wrapper?

Should I:

A) just hold cash on the account until the housing situation is sorted - but thats gambling on the £ and is it safe? I suppose house prices are in £
B) go ahead and stick it in LS80 as its spread around the world.
C) something else?

Thanks in advance.

[Mr Pointy]

If you have a likely requirement for the funds in the next six months I'd sell up & just hold the cash in the ISA. The upside of avoiding a substantial drop in value greatly outweighs the downside of missing out on a potential few percent in gains. If you were holding for the next five years it would be different, but you're not. If her house does sell then you can simply re-invest & at worst you'll have missed a small rise, given that no-one's really predicting massive gains in the next six months. At best the markets will have crashed & you can buy back in at the bottom.

[mx stu]

anonymous said:

[redacted]

Agree with this 100%... but will also add that if mum is relatively advanced in years the LS80 is surely too aggressive. A decent amount of my SIPP is in LS80 but that's because I've probably got at least 25-30 years till retirement (and the closer it gets to that the more I'll start to de-risk).

[anonymous-user]

Mr Pointy said:

If you have a likely requirement for the funds in the next six months I'd sell up & just hold the cash in the ISA.

^^^ This again.

It looks an easy decision because, as someone has already explained above, the risk is NOT symmetrical in your time frame. The downside risk (-25%?) is massively bigger than the upside opportunity (+5%?).

Further, as it's within an ISA you don't get a CGT bill by playing for safety. This tilts the balance even more towards cash.

[was8v]

OK thanks all.

---

I meant LS20 20% equity, oops-----


So is the money safe there languishing as cash on account? does the 70k bank protection apply to it? what if there a massive crash and the provider goes bust....? can it?

At least invested in fund I still have the value of the underlying investments....

[Mr Pointy]

was8v said:

OK thanks all.

I meant LS20 20% equity, oops

So is the money safe there languishing as cash on account? does the 70k bank protection apply to it? what if there a massive crash and the provider goes bust....? can it?

At least invested in fund I still have the value of the underlying investments....

Yes if you look at your HL ISA account page you'll see a cash tab & an income one. The funds will sit as cash on the capital account. I'm pretty sure HL wouldn't ever hold client funds in their own account & you should be covered by the FSCS scheme:
https://www.hl.co.uk/help#managing-your-online-acc...

While it's true you'd have the value of the underlying funds if you stay invested the value of these can plummet, as recent events have shown.

[was8v]

Great thanks all, questions answered.