Saving options

[firemunki]

With interest rates being crap as they are right now I could do with a bit of advice saving. I know this place is mainly frequented by powerfully built company directors investing many thousands, not the couple hundred most people have, but folk all started from somewhere!

Currently, I have 10% of wages going to pension and about £300 left to save each month. I'm saving £150 to stocks and shares ISA, £25 to premium bonds (cos you never know) and anything left between 150 and 200 to an NSI ISA. The NSI has about 4 months wages in it.

The ISA interest is now entirely pointless so wondering if I should:

• Pay more to stocks and shares since I don't intend to use the money at short notice

• Increase premium bonds and leave stocks/shares as is

• Leave as is

Thanks y'all!

[bitchstewie]

I'm not powerfully built or a director

Personally I'd probably want a bit more of a safety net than 4 months wages but that's one where everyone seems to have their own opinion and attitude.

The S&S ISA should be the best performer over the long term and you could always sell to raise funds if you needed to but of course if you have to do that you may be doing so at a loss depending on the timing.

[fatvik]

Hello,

If you don't forsee needing the money in the next 5 years or more, go S&S ISA. if you think you might need it sooner, I would split it between the premium bonds and the S&S ISA.

Do consider using some of the extra to spend on yourself / your loved ones.

FV

[Simpo Two]

Think of the likely yield.

Cash ISA - zip
PBs - 1.5% average?
S&S ISA has to be the winner; investments can be low risk if you prefer and still outperform PBs.

[T1547]

Is Vanguard LSXX still generally considered a good S&S ISA to go for? Any ‘better’ alternatives?

[VR99]

bhstewie said:

I'm not powerfully built or a director

Personally I'd probably want a bit more of a safety net than 4 months wages but that's one where everyone seems to have their own opinion and attitude.

The S&S ISA should be the best performer over the long term and you could always sell to raise funds if you needed to but of course if you have to do that you may be doing so at a loss depending on the timing.

I'd agree with the above. Everyone has their own risk tolerance but I would prefer to have a bigger cash buffer given the increased uncertainty from the combination of Covid and Brexit (hopefully just short term turbulence from the latter..).

Op - I also put £150 p/m into a Vanguard S&S ISA... you could always up it to £200 p/m...I keep saying I will but haven't yet..mental barrier for me even though it's a no brainer as even when the markets drop you simply get more units for a given month.

[anonymous-user]

I’ve had good, consistent growth from Vanguard FTSE Developed World ex-U.K. Equity Index Fund within a s&s isa wrapper this year. I’d hate to recommend any financial product to anyone but it’s been superb for me.

[firemunki]

Cool thanks everyone, pretty much what I thought but wanted a second opinion.

Will up stocks n shares and remainder in bonds and cash ISA since there's nothing I want to purchase in the near future, my van is paid outright and I love it too much to change!

[NickCQ]

Do you own your own place or rent? Do you have a mortgage you could overpay / could you use one of the government schemes to try and get on the ladder (LISA / H2B etc)?

[firemunki]

Own with my better half, that money isn't included in these calculations, this was just my savings. I'm kinda living like a monk right now so have a too much time to think/worry/nothing better to do!

[Crafty_]

Simpo Two said:

Think of the likely yield.

Cash ISA - zip
PBs - 1.5% average?
S&S ISA has to be the winner; investments can be low risk if you prefer and still outperform PBs.

PBs average out more around 1%, but statistically you need 25k in them to have a chance of getting anything, or so I read.

T1547 said:

Is Vanguard LSXX still generally considered a good S&S ISA to go for? Any ‘better’ alternatives?

Purely from what I've read after a bit of digging about...
Criticism of the LS funds is that they are UK centric, so if we get in the poop so are you.
The solutino (apparently) is to diversify, VWRL (Vanguard FTSE All-World UCITS ETF) is often mentioned.

If you trust the S&P index you can go VUSA but obviously its completely US based, so I guess the same thing applies about diversifying. The pay off is the S&P generally seems to do ok..

Criticism of VWRL is that its realtively expensive, (0.22%) and you can build a portfolio that replicates it for cheaper if you are preapred to fiddle about.

From what I can gather ETFs that follow a given index are usually pretty comparable in returns, but its the smaller details that show a difference.

I have read criticism of the FTSE 100 index in terms of under par returns.

you can look up funds and see what the country splits are and what stocks they hold on morningstar.com or trustnet.com - they will give you some idea of previous performance too.

Also, some of the fundsmith funds give good returns, but they are more expensive, there's a big thread on here for them.

Still picking it up as I go along... using Vanguard for now as they are a relatively cheap platform at the cost of only being able ot select their funds - weirdly they don't list all their ETFs - for example VWRP is the accumulating version of VWRL (i.e. it auto reinvests dividends) - you can get that on other platforms but not vanguards own!