Fixed rate ISA or tracker funds?

[watchesandwhisky]

Me, nearly 40 years old... So each month I save what I can, I am trying to max out my LISA for retirement, I have a workplace pension with a total of 16% income going into it from me and employer those two are no brainers for me. 

I have also started a stocks and shares ISA for this year, and I have a Barclays cash ISA at 4% 

So lets say I have £500 to invest each month in the ISAs, how would you allocate it in the current climate? The S&S ISA is a long term play, the cash ISA is also our emergency fund and has currently 20x the value of the S&S ISA

4% whilst well under inflation is guaranteed, but I know that the S&S ISA should not be neglected neither.  

Edited April 16, 2023 by watchesandwhisky

[Zeuk]

4 minutes ago, watchesandwhisky said:

Me, nearly 40 years old... So each month I save what I can, I am trying to max out my LISA for retirement, I have a workplace pension with a total of 16% income going into it from me and employer those two are no brainers for me. 

I have also started a stocks and shares ISA for this year, and I have a Barclays cash ISA at 4% 

So lets say I have £500 to invest each month in the ISAs, how would you allocate it in the current climate? The S&S ISA is a long term play, the cash ISA is also our emergency fund and has currently 20x the value of the S&S ISA

4% whilst well under inflation is guaranteed, but I know that the S&S ISA should not be neglected neither.  

Personally I prefer to put more in S&S and PMs than cash.  I just use cash interest as stop off points on the way to either but I do keep a float in the S&S ISA 

[Pete]

It is all about your attitude to risk.
When inflation is higher than the interest rates on cash savings you are steadily eroding the value of your savings.
In an ISA any growth is free of income tax but what use is that when your bucket has a hole in it and your money is dripping out ?

Provided you are investing surplus cash and have a reserve for emergencies then what I would do ( this is my personal viewpoint and not financial advice ) is to feed a stocks & shares ISA using an online platform like Hargreaves Lansdown. You can follow some of their suggested investment portfolios or just keep it simple and put your money into a tracker like the FTSE 100. Look at the charts over 5 and 10 years and don't get overly focussed on weekly or monthly charts as picking peaks and troughs doesn't work.

Secondly, assuming you are a tax payer, consider opening up a SIPP also with HL if you wish.
You will get tax relief on your investments so the amount invested increases by 20% or more and again you have full control over your selection of funds.

Choose in both cases well known funds and not individual shares unless you wish to try this - I don't recommend from past experience.
UK Equities or trackers with all dividends reinvested and funds that have valuations of over £1 billion are possibly your safest bet.

The nice thing about most funds is the buy and sell prices are the same so should you choose to switch funds you are not paying a percentage in fees each time.
Trading on-line with HL gives you real time prices and monitoring of your portfolio daily.
Switching and buying / selling funds or percentages of funds takes a couple of clicks and it's done.

 

 

[ArgentSmith]

get some bitcoin even if its only a couple of grands worth

[Lulubell01]

2 minutes ago, ArgentSmith said:

get some bitcoin even if its only a couple of grands worth

I wish I did a few weeks back when it was $19k .

But put 9k on top of my 15% airdropped Flare ..

But wrapped it and to date currently worth 18k 

[ArgentSmith]

5 minutes ago, Lulubell01 said:

I wish I did a few weeks back when it was $19k .

But put 9k on top of my 15% airdropped Flare ..

But wrapped it and to date currently worth 18k 

Brilliant!! not a fan of alt coins for a few reasons but a win is a win 😁 For me Bitcoin is a long term hold, not life changing if it fails somehow but potentially life changing if it continues to succeed. So many people speculating on alt coins but not for me.

[Lulubell01]

I got a few XRP and was airdropped a few flare 2 yrs back .

They moved the goal posts as now voted to receive only 15 % total from the pot.

To get the rest you got to wrap (WFLR) to get the rest over 3 yrs.

I looked into this and decided to put 9k as you get 15% approx per month on your total wrapped flare .

Currently gettting $1500 a month based on 0.035 it currently is but I don’t cash out I wrap them again so on etc..

It’s a obvious a risk as it could do a doge but win win at present.

Here is the tool showing what you can get after 3 yrs based on what you hold at present.

https://flare.space/dapp/distribution/

 

 

Edited April 16, 2023 by Lulubell01
Dollars not pounds

[watchesandwhisky]

I do have a small amount of BTC and ETH at a ratio of 60% btc, 40% ETH, I have put it away in my long term hold no matter what savings as its not cost me anything. 👍 

Thanks Pete! I currently have 6 months emergency funds in my cash ISA, If i was to lose my job at the royal mail (not out of the realms of possibilities!) then I could survive for at least 5/6 months with all bills and mortgage covered along with food ect. 

Hargreaves lansdown is the site I use, Others may be cheaper but I like them - I do have a small SIPP with 500 quid in it, but I decided the Lifetime ISA is better for me on my wages, I get the same tax relief as a SIPP in it and can pay into it for another decade, I can only withdraw in 20 years at 60 but I can withdraw 100% lump tax free unlike a SIPP. I think If I max out the LISA one year the SIPP will be useful. Im thinking it might be nice to be able to reduce hours worked at 60 until pension age, or at least have some options.  The LISA has a max annual contributions of 4k, So Maybe I should max this out each month and any surplus goes on funds in the S&S ISA.

My LISA has these funds

Fidelity Index UK

Fidelity Index World

Legal & General International Index Trust 

My Isa currently only has 

Legal & General UK 100 Index Trust 

Legal & General International Index Trust

I tried dabbling in individual stocks some time ago and It is not for me, Now going for "time in the market" rather than "time the market" 

Maybe the time is now to move 100% to the S&S ISA and forget the cash one..

And buy the odd Sov😁

Edited April 16, 2023 by watchesandwhisky

[FlorinCollector]

Why do so many use H&L? I tried to use them at the very start of my investing journey. 

High fees and outdated looking app.

What benefit do you get from H&L?

[watchesandwhisky]

They have a great selection of funds, all have zero fees to trade - Personally I have never used the app and do everything from desktop - I like the layout of everything, It feels very user friendly.  I Have been happy with the service I received there and for some reason trust them more than some newer companies. 

They are competitive and match AJ bell for the Lifetime ISA with a 0.25% platform fee. The Stocks and shares ISA I would probably be better of moving to someone like AJ bell, but for the small regular investments I do into funds HL suit me due to no fees on fund buys/sells. The 0.45% platform fee isn't ideal, to be honest I have not done the maths to try and work out how much better off I would be elsewhere with my investments. A rainy day project perhaps!

If I was buying stocks I might have to move, but for funds they are great.

My Sipp is with vanguard.

Edited April 16, 2023 by watchesandwhisky

[FlorinCollector]

15 minutes ago, watchesandwhisky said:

They have a great selection of funds, all have zero fees to trade - Personally I have never used the app and do everything from desktop - I like the layout of everything, It feels very user friendly.  I Have been happy with the service I received there and for some reason trust them more than some newer companies. 

They are competitive and match AJ bell for the Lifetime ISA with a 0.25% platform fee. The Stocks and shares ISA I would probably be better of moving to someone like AJ bell, but for the small regular investments I do into funds HL suit me due to no fees on fund buys/sells. The 0.45% platform fee isn't ideal, to be honest I have not done the maths to try and work out how much better off I would be elsewhere with my investments. A rainy day project perhaps!

If I was buying stocks I might have to move, but for funds they are great.

My Sipp is with vanguard.

Thank you for the breakdown mate

[watchesandwhisky]

4 minutes ago, FlorinCollector said:

Thank you for the breakdown mate

No problem @FlorinCollector ! 

Having a quick look if its regular purchases into funds and you want a big choice they are very good. For individual stock buying they are years out of date with their pricing it seems. For me personally funds are the way to go as I do tend to act on impulse and they give me a fire and forget mentality with them.

[FlorinCollector]

15 minutes ago, watchesandwhisky said:

No problem @FlorinCollector ! 

Having a quick look if its regular purchases into funds and you want a big choice they are very good. For individual stock buying they are years out of date with their pricing it seems. For me personally funds are the way to go as I do tend to act on impulse and they give me a fire and forget mentality with them.

Yes I had never used them for funds only when looking at individual shares I had seen how expensive it was. So never bothered looking further. 

[CANV]

Cash will always yield less than inflation.  Well spread investments over global stock markets will outperform over time.  Well they always have .  Much like your primary property which has great tax benefits ..   pensions are a better bet than isas , you get a freebie on the way in. When it’s most useful 

[Spyder]

This is not advice to buy these bonds but these are the ones have investments in STAB and RSAB both paying 7 3/8% and can both be bought at just over 100p each, pays out 4 times a year. IPF3 pays 12% , can be bought at about 100p and pays out twice a year. Bit more risky and is a five year bond. All are bought in a ISA stocks and shares.  DYOR