Noob to investing - how to invest ISA
Discussion
Vanguard are decent.....or take a look at the sticky at the top and consider IM.
Low fees are definitely important, but won’t give the full story. Vanguard (if investing direct) will likely be slightly lower cost, but not necessarily make you more money
Vanguard is entirely your decision.
IM gives you the option to have a chat with one of the team there to discuss (guidance, *not* advice, note, & under zero pressure to buy anything from them!): several here have found that useful, me included.
Our family has funds with Vanguard, AJBell (‘kids’ LISAs) as well as IM (although far more with IM, to be fair - they offer pensions and general investment accounts).
Specifically on ISAs, you can only put in 20k in any year, so you can only put half your cash....with the option to put the other half after the start of the FY22 tax year.
Presumably you own a house? If not, then a LISA makes a lot of sense for the max 4K allowed. (there are several types of ISA, & you can spread your £20k around them).
I believe your future self will thank you for taking action now, whichever you chose
Low fees are definitely important, but won’t give the full story. Vanguard (if investing direct) will likely be slightly lower cost, but not necessarily make you more money
Vanguard is entirely your decision.
IM gives you the option to have a chat with one of the team there to discuss (guidance, *not* advice, note, & under zero pressure to buy anything from them!): several here have found that useful, me included.
Our family has funds with Vanguard, AJBell (‘kids’ LISAs) as well as IM (although far more with IM, to be fair - they offer pensions and general investment accounts).
Specifically on ISAs, you can only put in 20k in any year, so you can only put half your cash....with the option to put the other half after the start of the FY22 tax year.
Presumably you own a house? If not, then a LISA makes a lot of sense for the max 4K allowed. (there are several types of ISA, & you can spread your £20k around them).
I believe your future self will thank you for taking action now, whichever you chose
assuming you're looking at S&S ISA's
You could go with a Vanguard fund ( quite a few available depending on your appetite for risk ) or even our very own forum regulars Intelligent Money,
they're both very well regarded and have very competitive pricing structures, or you could research and choose your own
You could put the whole £40K in if you wanted (£20K now before the end of march and another £20K at the beginning of April ),
you could also go the same route but go for different funds, either with the same provider or perhaps open a fund with one provider before April then open another after the new tax year starts perhaps with a different level of risk.
You can have more than one S&S ISA but you're only allowed to pay into one in each tax year currently upto a maximum of £20K
if you're not yet a home owner and are trying to save for a deposit you could also open a S&S LISA along side your S&S ISA which gives you the benefit of a government bonus ( 25% of anything you pay in up to a max of £1K ),
the slight issue with this is it can only be used towards a house purchase or kept as a retirement fund otherwise any withdrawals made mean you lose the 25% bonus + 25% of any gains you make and the list of providers available isn't that long either.
It's well worth doing some research before you take the plunge,
I opened my 1st S&S ISA back in the 90's and just plumped for my banks medium/high risk offering which I then paid into for years without taking much of an interest,
then when I did start to compare it to what else was available I realised not only was the performance poor when compared to the likes of Vanguard, I was also paying substantially more in management fees for the privilege
You can check places like Morningstar and compare fund ratings and performance + get an idea of how the funds are invested
"Just edited to add I obviously wasn't quick enough as most of what I've just written has already been said by mikeiow"
You could go with a Vanguard fund ( quite a few available depending on your appetite for risk ) or even our very own forum regulars Intelligent Money,
they're both very well regarded and have very competitive pricing structures, or you could research and choose your own
You could put the whole £40K in if you wanted (£20K now before the end of march and another £20K at the beginning of April ),
you could also go the same route but go for different funds, either with the same provider or perhaps open a fund with one provider before April then open another after the new tax year starts perhaps with a different level of risk.
You can have more than one S&S ISA but you're only allowed to pay into one in each tax year currently upto a maximum of £20K
if you're not yet a home owner and are trying to save for a deposit you could also open a S&S LISA along side your S&S ISA which gives you the benefit of a government bonus ( 25% of anything you pay in up to a max of £1K ),
the slight issue with this is it can only be used towards a house purchase or kept as a retirement fund otherwise any withdrawals made mean you lose the 25% bonus + 25% of any gains you make and the list of providers available isn't that long either.
It's well worth doing some research before you take the plunge,
I opened my 1st S&S ISA back in the 90's and just plumped for my banks medium/high risk offering which I then paid into for years without taking much of an interest,
then when I did start to compare it to what else was available I realised not only was the performance poor when compared to the likes of Vanguard, I was also paying substantially more in management fees for the privilege
You can check places like Morningstar and compare fund ratings and performance + get an idea of how the funds are invested
"Just edited to add I obviously wasn't quick enough as most of what I've just written has already been said by mikeiow"
Edited by timberman on Friday 29th January 00:30
If the money is already in a cash ISA you can transfer this to a provider of a stocks and shares ISA without losing the tax free status or being limited by the £20k annual limit.
Hargreaves Lansdown will give you a small cash sweetener (£100 or so, I think - it varies depending on the amount transferred) to transfer to them, though they are at the pricier end of platform fees. The do offer a wider range of funds than Vanguard though.
Hargreaves Lansdown will give you a small cash sweetener (£100 or so, I think - it varies depending on the amount transferred) to transfer to them, though they are at the pricier end of platform fees. The do offer a wider range of funds than Vanguard though.
I'd just add Fidelity to the mix - costs more than Vanguard but there's a massive range of funds, ETFs and shares to choose from. https://www.fidelity.co.uk/services/charges-fees/f...
timberman said:
You can have more than one S&S ISA but you're only allowed to pay into one in each tax year currently upto a maximum of £20K
I thought it was that you could only open a new ISA account at a rate of one per year?edit: yes I'm an idiot. You can only pay in to one of each type of ISA a year up to the total threshold. Didn't realise that.
I recently opened a S&S ISA with Vanguard, the website is easy enough to use.
The platform fee is 0.15% and then you pay the fee for whichever fund(s) you invest in, I've got VWRL which is 0.22%.
Note that they do charge for a buy if you want it to happen right now, but its free if you select the other option
They really expect people to be investing regularly via direct debit - you don't have to do this and can put a lump sum in, but the only way to do that is a card transaction - no bank transfer capability which is a bit rubbish.
You can set up a direct debit to pay fees (quarterly), if you don't they try to take it from cash in the ISA, if you don't have enough they will sell whatever is needed to pay.
The biggest problem is figuring out what to buy within the wrapper - as someone said you can use morningstar to look at various funds, trustnet.com does something similar.
The biggest issue with the vanguard platform is you can only buy their funds/ETFs etc. On the other hand, if you go for a provider that lets you buy other funds/etfs etc, you have even more choice which makes it harder!
The platform fee is 0.15% and then you pay the fee for whichever fund(s) you invest in, I've got VWRL which is 0.22%.
Note that they do charge for a buy if you want it to happen right now, but its free if you select the other option
They really expect people to be investing regularly via direct debit - you don't have to do this and can put a lump sum in, but the only way to do that is a card transaction - no bank transfer capability which is a bit rubbish.
You can set up a direct debit to pay fees (quarterly), if you don't they try to take it from cash in the ISA, if you don't have enough they will sell whatever is needed to pay.
The biggest problem is figuring out what to buy within the wrapper - as someone said you can use morningstar to look at various funds, trustnet.com does something similar.
The biggest issue with the vanguard platform is you can only buy their funds/ETFs etc. On the other hand, if you go for a provider that lets you buy other funds/etfs etc, you have even more choice which makes it harder!
Pistonheader101 said:
Was looking to buy another weekend toy, but now decided to put my sensible hat on.
Currently have £40k sitting in a lloyds cash isa earning 0.05%
how would one go about "investing". Lloyds offer some funds, but not sure if their fees are worthwhile.
what are the lowest fee platforms?
Firstly don't take the cash out.Currently have £40k sitting in a lloyds cash isa earning 0.05%
how would one go about "investing". Lloyds offer some funds, but not sure if their fees are worthwhile.
what are the lowest fee platforms?
If you open a S&S ISA you need to transfer the £40K across so it stays inside the ISA wrapper.
The "lowest fee platform" depends a lot on what you're investing in and how often (if at all) you plan on adding etc.
Vanguard are a good choice and are cheap but not necessarily the lowest cost.
mikeiow said:
Vanguard are decent.....or take a look at the sticky at the top and consider IM.
Low fees are definitely important, but won’t give the full story. Vanguard (if investing direct) will likely be slightly lower cost, but not necessarily make you more money
Vanguard is entirely your decision.
IM gives you the option to have a chat with one of the team there to discuss (guidance, *not* advice, note, & under zero pressure to buy anything from them!): several here have found that useful, me included.
Our family has funds with Vanguard, AJBell (‘kids’ LISAs) as well as IM (although far more with IM, to be fair - they offer pensions and general investment accounts).
Specifically on ISAs, you can only put in 20k in any year, so you can only put half your cash....with the option to put the other half after the start of the FY22 tax year.
Presumably you own a house? If not, then a LISA makes a lot of sense for the max 4K allowed. (there are several types of ISA, & you can spread your £20k around them).
I believe your future self will thank you for taking action now, whichever you chose
Thanks for the mention Mike. Low fees are definitely important, but won’t give the full story. Vanguard (if investing direct) will likely be slightly lower cost, but not necessarily make you more money
Vanguard is entirely your decision.
IM gives you the option to have a chat with one of the team there to discuss (guidance, *not* advice, note, & under zero pressure to buy anything from them!): several here have found that useful, me included.
Our family has funds with Vanguard, AJBell (‘kids’ LISAs) as well as IM (although far more with IM, to be fair - they offer pensions and general investment accounts).
Specifically on ISAs, you can only put in 20k in any year, so you can only put half your cash....with the option to put the other half after the start of the FY22 tax year.
Presumably you own a house? If not, then a LISA makes a lot of sense for the max 4K allowed. (there are several types of ISA, & you can spread your £20k around them).
I believe your future self will thank you for taking action now, whichever you chose
Pistonheader101 - Please free to get in touch with me if you would like to talk over all of this. Vanguard are excellent for index trackers, if that is where you are looking to invest though.
There are also many other options and I am happy to explain them to you (in plain English!).
MikeKite said:
mikeiow said:
Low fees are definitely important, but won’t give the full story. Vanguard (if investing direct) will likely be slightly lower cost, but not necessarily make you more money
I'm interested, could you please tell me more?HL for example are more expensive than Vanguard, but offer a complete range of funds and stocks. If you only want trackers and pre-made packages then you're not getting much else from HL than you would be with Vanguard, but if you want to have bonds, stocks, and a much much larger range of funds inside your ISA than the extra platform fee becomes negligible.
Condi said:
MikeKite said:
mikeiow said:
Low fees are definitely important, but won’t give the full story. Vanguard (if investing direct) will likely be slightly lower cost, but not necessarily make you more money
I'm interested, could you please tell me more?HL for example are more expensive than Vanguard, but offer a complete range of funds and stocks. If you only want trackers and pre-made packages then you're not getting much else from HL than you would be with Vanguard, but if you want to have bonds, stocks, and a much much larger range of funds inside your ISA than the extra platform fee becomes negligible.
MikeKite said:
I'm still interested. Any real-world examples?
Um.... well.... loads. There are plenty of shares which have outperformed even the best Vanguard fund over different time periods. Had you bought Tesla for example you'd have returned circa 700% in less than 2 years. You can't do that in a Vanguard ISA but could do in a HL S+S ISA. In which case the small additional cost for the HL platform vs the Vanguard platform is totally irrelevant.
Even if you want to hold funds rather than shares, there are loads of asset managers who have outperformed Vanguard and have specialist areas they cover (eg tech, biotech, renewable power, country specific etc).
It just depends how active you want to be. If you want a "set and forget" program then Vanguard is cheap and cheerful with good returns. If you want to be more involved across different asset classes and have more control over what you invest in then you simply cant do that with Vanguard and you pay more for the more comprehensive platforms hoping to get a better return using your own opinion and knowledge. Whether that be IM (forum sponsors and good reputation) or HL, Fidelity, AJ Bell etc.
Condi said:
MikeKite said:
I'm still interested. Any real-world examples?
Um.... well.... loads. There are plenty of shares which have outperformed even the best Vanguard fund over different time periods. Had you bought Tesla for example you'd have returned circa 700% in less than 2 years. You can't do that in a Vanguard ISA but could do in a HL S+S ISA. In which case the small additional cost for the HL platform vs the Vanguard platform is totally irrelevant.
Even if you want to hold funds rather than shares, there are loads of asset managers who have outperformed Vanguard and have specialist areas they cover (eg tech, biotech, renewable power, country specific etc).
It just depends how active you want to be. If you want a "set and forget" program then Vanguard is cheap and cheerful with good returns. If you want to be more involved across different asset classes and have more control over what you invest in then you simply cant do that with Vanguard and you pay more for the more comprehensive platforms hoping to get a better return using your own opinion and knowledge. Whether that be IM (forum sponsors and good reputation) or HL, Fidelity, AJ Bell etc.
MikeKite said:
Genuinely interested in someone that can pick these future outperformers, especially if I can get consistent performance ahead of Vanguard over the long run. Where do I start?
You can go on the HL website and look through all the different funds and find something you like. There are better people on here than I to point you in the right direction. Talk to the guys at IM, they can talk you through what they do and how. Gassing Station | Finance | Top of Page | What's New | My Stuff