Should I liquidate my ISAs?
Discussion
My savings are currently distributed in my current account (40%), easy access cash ISAs (40%), underperforming bank shares (15%) and a help to buy ISA (5%)
I am 29 and not a homeowner.
The yields from these 'investments' is pitiful so I am considering liquidating my cash ISAs and reinvesting the money into index funds and bonds and averaging down my bank shares with a view to taking a higher risk / reward strategy.
The sum total constitutes a mortgage deposit of 80% LTV or lower.
Ultimate goal is to get the money working for me immediately but with one eye on the property market just in case.
I live with my Mum however my personal circumstances are such that although I could look to buy next year, I could equally take an overseas assignment and work out of the country for a period, or take a sabbatical from work and go travelling- I really don't know at the moment.
Unless I end up buying very soon, which is unlikely, this money is sitting about gaining me a paltry £50 a month.
My main question is are there any drawbacks to liquidating my ISAs for this reason, what is the tax implication?
Go easy on me as my understanding of this stuff is that of the average 29 year old.
I am 29 and not a homeowner.
The yields from these 'investments' is pitiful so I am considering liquidating my cash ISAs and reinvesting the money into index funds and bonds and averaging down my bank shares with a view to taking a higher risk / reward strategy.
The sum total constitutes a mortgage deposit of 80% LTV or lower.
Ultimate goal is to get the money working for me immediately but with one eye on the property market just in case.
I live with my Mum however my personal circumstances are such that although I could look to buy next year, I could equally take an overseas assignment and work out of the country for a period, or take a sabbatical from work and go travelling- I really don't know at the moment.
Unless I end up buying very soon, which is unlikely, this money is sitting about gaining me a paltry £50 a month.
My main question is are there any drawbacks to liquidating my ISAs for this reason, what is the tax implication?
Go easy on me as my understanding of this stuff is that of the average 29 year old.
HustleRussell said:
My savings are currently distributed in my current account (40%), easy access cash ISAs (40%), underperforming bank shares (15%) and a help to buy ISA (5%)
I am 29 and not a homeowner.
The yields from these 'investments' is pitiful so I am considering liquidating my cash ISAs and reinvesting the money into index funds and bonds and averaging down my bank shares with a view to taking a higher risk / reward strategy.
The sum total constitutes a mortgage deposit of 80% LTV or lower.
Ultimate goal is to get the money working for me immediately but with one eye on the property market just in case.
I live with my Mum however my personal circumstances are such that although I could look to buy next year, I could equally take an overseas assignment and work out of the country for a period, or take a sabbatical from work and go travelling- I really don't know at the moment.
Unless I end up buying very soon, which is unlikely, this money is sitting about gaining me a paltry £50 a month.
My main question is are there any drawbacks to liquidating my ISAs for this reason, what is the tax implication?
Go easy on me as my understanding of this stuff is that of the average 29 year old.
Other wiser heads will chip in but two thoughts:I am 29 and not a homeowner.
The yields from these 'investments' is pitiful so I am considering liquidating my cash ISAs and reinvesting the money into index funds and bonds and averaging down my bank shares with a view to taking a higher risk / reward strategy.
The sum total constitutes a mortgage deposit of 80% LTV or lower.
Ultimate goal is to get the money working for me immediately but with one eye on the property market just in case.
I live with my Mum however my personal circumstances are such that although I could look to buy next year, I could equally take an overseas assignment and work out of the country for a period, or take a sabbatical from work and go travelling- I really don't know at the moment.
Unless I end up buying very soon, which is unlikely, this money is sitting about gaining me a paltry £50 a month.
My main question is are there any drawbacks to liquidating my ISAs for this reason, what is the tax implication?
Go easy on me as my understanding of this stuff is that of the average 29 year old.
Do not take money out of the ISA wrapper unless you have no choice - you can transfer from a cash ISA to a S&S ISA all within a wrapper and this way you get to keep any allowance you have remaining from the years £20K ISA limit.
Investments are not savings i.e. if you'd put in £10K one month ago you'd have £9K now (ask me how I know this
) - if you don't need the money for 10 years that might be OK, if you need it tomorrow you've just lost a grand.dingg said:
change them from cash isa to stocks and shares isa ,
ie retain that tax free benefit .
do not cash them in to start afresh
This. Much better long term return from equities but DO NOT take the £’s out of the ISA wrapper. You can only lose money holding cash as nobody offers an interest rate to match inflation.ie retain that tax free benefit .
do not cash them in to start afresh
Not the cheapest but take a look here, HL are very helpful:-
https://www.hl.co.uk
HustleRussell said:
My savings are currently distributed in my current account (40%), easy access cash ISAs (40%), underperforming bank shares (15%) and a help to buy ISA (5%)
I am 29 and not a homeowner.
The yields from these 'investments' is pitiful so I am considering liquidating my cash ISAs and reinvesting the money into index funds and bonds and averaging down my bank shares with a view to taking a higher risk / reward strategy.
The sum total constitutes a mortgage deposit of 80% LTV or lower.
Ultimate goal is to get the money working for me immediately but with one eye on the property market just in case.
I live with my Mum however my personal circumstances are such that although I could look to buy next year, I could equally take an overseas assignment and work out of the country for a period, or take a sabbatical from work and go travelling- I really don't know at the moment.
Unless I end up buying very soon, which is unlikely, this money is sitting about gaining me a paltry £50 a month.
My main question is are there any drawbacks to liquidating my ISAs for this reason, what is the tax implication?
Go easy on me as my understanding of this stuff is that of the average 29 year old.
Open an account with S&S ISA account with HL (or similar) and "transfer in" this years allowanceI am 29 and not a homeowner.
The yields from these 'investments' is pitiful so I am considering liquidating my cash ISAs and reinvesting the money into index funds and bonds and averaging down my bank shares with a view to taking a higher risk / reward strategy.
The sum total constitutes a mortgage deposit of 80% LTV or lower.
Ultimate goal is to get the money working for me immediately but with one eye on the property market just in case.
I live with my Mum however my personal circumstances are such that although I could look to buy next year, I could equally take an overseas assignment and work out of the country for a period, or take a sabbatical from work and go travelling- I really don't know at the moment.
Unless I end up buying very soon, which is unlikely, this money is sitting about gaining me a paltry £50 a month.
My main question is are there any drawbacks to liquidating my ISAs for this reason, what is the tax implication?
Go easy on me as my understanding of this stuff is that of the average 29 year old.
You're 29 so time is on your side, as such can afford to take some more risk. Vanguard Lifestrategy is a good start (60/40 split or 80/20 split stocks and bonds)
Don't worry too much about the need to own a home. Plenty of time for that and as you are "investing" you are still buying income generating assets and over time this will work well for you.
In your situation, i'd stay invested, save/invest as much as possible (low living cost) and keep your flexibility.
I'd also seriously consider taking the work / travel option over jumping into a house. It's a costly move to undo if needed.
HustleRussell said:
My main question is are there any drawbacks to liquidating my ISAs for this reason, what is the tax implication?
If you open a S&S account (either with your current provider or a new one) and transfer in your ISA(s) then there are no tax implications. Any future investing in those accounts is capital and income tax free.Only drawback is crystallising the loss on your bank shares, but i personally would go ahead. Go ahead and get all your money into a decent global equities fund. Vanguard indexes are good, or something like fundsmith
Oh and read "how to own the world" - it's the PH investment manual
trowelhead said:
Only drawback is crystallising the loss on your bank shares
The bank shares were bought via a Barclays 'smart investor' account so they are separate from my ISAs and I don't necessarily have to crystallise my losses; I can continue to watch on disappointedly. It's not that bad, I'm a little more than 10% down. At least Lloyds is paying dividends. HustleRussell said:
trowelhead said:
Only drawback is crystallising the loss on your bank shares
The bank shares were bought via a Barclays 'smart investor' account so they are separate from my ISAs and I don't necessarily have to crystallise my losses; I can continue to watch on disappointedly. It's not that bad, I'm a little more than 10% down. At least Lloyds is paying dividends. We don't know how much the numbers you are talking about are. When I was 29, I barely had funds to buy beer, 40% of my savings was probably £100 !!
Don't need to know: but right now, I would *personally* be tempted to leave the cash ISA where it is (unless there is a better one you can transfer to) - stocks clearly had a bumpy ride last week and could be in for more over coming weeks & months.
The current account: well, obviously there are some offering a bit of interest (perhaps 1.5%) - but at your age I would start some monthly contribution to a Shocks&Scares ISA - don't move a big lump in one go, as someone above said, put some in regularly - I am quite a fan of the Vanguard ones (& at your age I would suggest you could potentially go 100% if this is long term?).
Next, if you think you may get a house, why not punt some into a LISA or "Help to Buy ISA"? I'm no expert on that (being an older PHer!), DYOR!
Finally, look after your mum - lob her some rent & cleaning cash, & don't forget to get out & enjoy life....if you haven't taken time to travel, I would advocate that (combined with job perhaps!) - travel broadens the mind
Don't need to know: but right now, I would *personally* be tempted to leave the cash ISA where it is (unless there is a better one you can transfer to) - stocks clearly had a bumpy ride last week and could be in for more over coming weeks & months.
The current account: well, obviously there are some offering a bit of interest (perhaps 1.5%) - but at your age I would start some monthly contribution to a Shocks&Scares ISA - don't move a big lump in one go, as someone above said, put some in regularly - I am quite a fan of the Vanguard ones (& at your age I would suggest you could potentially go 100% if this is long term?).
Next, if you think you may get a house, why not punt some into a LISA or "Help to Buy ISA"? I'm no expert on that (being an older PHer!), DYOR!
Finally, look after your mum - lob her some rent & cleaning cash, & don't forget to get out & enjoy life....if you haven't taken time to travel, I would advocate that (combined with job perhaps!) - travel broadens the mind
Thanks
I’ve been a lucky boy in that respect. I’ve worked for the same company in the flagging oil & gas industry since starting as an apprentice in 2009. Due to the tough market my salary was always behind the curve. Even though the wages were small many of my peers were unsuccessful in dodging the bullet. Didn’t really have the impetus to move out in my early 20s even if my salary did allow so I enjoyed what disposable I had.
Eventually an opportunity for an overseas assignment came up. In retrospect this probably got me out of the danger zone. After I agreed to take the role it transpired that the location was Thailand, the duration 18 months with a 10 week on 3 week off rotation, and the terms included great big living and travel allowances which basically put a 2.5x multiplier on my little salary. Cue some great times, one for the ‘purple patch’ thread.
Long and short of it is I went out there with about £10k to my name and came back with £55k, a few years on it’s a little under £70k (my salary has finally ‘corrected’ this year after much perseverance).
I have paid Mum maintenance throughout which I pegged at around 1% of gross once a month. I do most of the cooking and I never turn the heating up!
I’ve been a lucky boy in that respect. I’ve worked for the same company in the flagging oil & gas industry since starting as an apprentice in 2009. Due to the tough market my salary was always behind the curve. Even though the wages were small many of my peers were unsuccessful in dodging the bullet. Didn’t really have the impetus to move out in my early 20s even if my salary did allow so I enjoyed what disposable I had.
Eventually an opportunity for an overseas assignment came up. In retrospect this probably got me out of the danger zone. After I agreed to take the role it transpired that the location was Thailand, the duration 18 months with a 10 week on 3 week off rotation, and the terms included great big living and travel allowances which basically put a 2.5x multiplier on my little salary. Cue some great times, one for the ‘purple patch’ thread.
Long and short of it is I went out there with about £10k to my name and came back with £55k, a few years on it’s a little under £70k (my salary has finally ‘corrected’ this year after much perseverance).
I have paid Mum maintenance throughout which I pegged at around 1% of gross once a month. I do most of the cooking and I never turn the heating up!
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