Stocks n Shares ISA

[Select coaches]

No specific timescale or anything as to when I would need the money but would be for at least 5 -10 years if not longer, really just want something that can return a decent amount of money without me worrying about losing a chunk of it, which is why I was looking at the 20% one to start with and then maybe changing to a higher % further down the line. Just don't like the idea of putting it all in to a 80 or 100% one to start with and possibly losing a large chunk of money.

< risk = < reward
> risk = > potential reward

If you don’t want to risk it then a savings account is for you. If you want to make any money you have to be happy to potentially lose some of it.

 

[Blue_Monday]

< risk = < reward
> risk = > potential reward

If you don’t want to risk it then a savings account is for you. If you want to make any money you have to be happy to potentially lose some of it.

I don't mind the low risk side of things which is why taking the 20% or even 40% one seems ideal and should pay more than a savings account.

 

[42]

No specific timescale or anything as to when I would need the money but would be for at least 5 -10 years if not longer, really just want something that can return a decent amount of money without me worrying about losing a chunk of it, which is why I was looking at the 20% one to start with and then maybe changing to a higher % further down the line. Just don't like the idea of putting it all in to a 80 or 100% one to start with and possibly losing a large chunk of money.

I've been investing for nearly 3 years now & in that time we've had the big covid slump, and also there was a 10-15% drop the xmas before last. Each time it's pretty much recovered within 3 months.

If its something you're going to be making contributions on a regular basis, then drops can be good as you then buy more units at a lower price, which in the longer run makes you more money.

When you've never done it before, the volatility of the funds can be quite daunting. Theres tons of videos on YouTube explaining how Index trackers & the markets work, which are probably worth a watch & might make you more comfortable with the higher risk.

 

[lurker]

No specific timescale or anything as to when I would need the money but would be for at least 5 -10 years if not longer, really just want something that can return a decent amount of money without me worrying about losing a chunk of it, which is why I was looking at the 20% one to start with and then maybe changing to a higher % further down the line. Just don't like the idea of putting it all in to a 80 or 100% one to start with and possibly losing a large chunk of money.

It’ll go back up if you wait long enough, have to think long term

 

[Select coaches]

I don't mind the low risk side of things which is why taking the 20% or even 40% one seems ideal and should pay more than a savings account.

I, personally would do like recommended above and drip feed it monthly at whatever you are comfortable with. Spreads the risk a bit.

 

[42]

Tbh, when I started out theres no way I'd have been comfortable chucking in £20k in one go. Think I started with about £1,500 & just top it up with a few hundred each month

 

[Deleted member 26533]

I don't mind the low risk side of things which is why taking the 20% or even 40% one seems ideal and should pay more than a savings account.

At your age I'd personally go with less bonds. I also agree with averaging it out a bit. Maybe calculate your estimated monthly contributions over a given time, plus the planned initial contribution and then divide it by a certain amount of payments

 

[englishman abroad]

I've 15k sat in a UK (Nationwide BS savings account) making next to nowt.
I won't need the money until I retire (5 years or so), any thoughts on options?

 

[Hair Flick]

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Vanguard's all world product would probably suit well for longer term. Think of it like a FTSE 100 tracker but covering the world rather than just UK stocks.

If you wanted, you can mitigate your risk short term by putting your £20k into an ISA now but buying the fund in chunks (say £10k now and in 6 months, or £5k every 3 months). But that's less of a concern if you genuinely don't want access any time soon.

Edit: disclaimer..obviously there are other funds available so not advising as such (I'm not qualified to do so), just giving an example of a different Vanguard product used for a different purpose

Quick query. Might the VWRP fund be better for long term as the dividends are reinvested rather than paid out? As I understand it it’s the same funds run by the same manager and the same ongoing fees. Could be completely wrong mind.

 

[Edinburgh Black Cat]

< risk = < reward
> risk = > potential reward

If you don’t want to risk it then a savings account is for you. If you want to make any money you have to be happy to potentially lose some of it.

What I'd say to this is that it was my approach for the last 10 years or so (I'm also 32). But it was the totally wrong approach - not because I would have made £x more had I done something differently (albeit, I would have) but it was the wrong approach because I didn't understand the risk properly.

This stuff should really be taught much better at schools. @Blue_Monday As others have suggested it's well worth reading up on risk and what that means short vs long term.

 

[Big Jeff]

What happens if it has a blip near the end of your 10 year investment and you lose all the profit you made earlier

 

[Hair Flick]

What happens if it has a blip near the end of your 10 year investment and you lose all the profit you made earlier

A blip and the loss of 10 years gains are highly unlikely to equate to the same levels. That said, the investment is not without risk which is why the advice is be sure you understand the risks associated with any investment, whilst recognising that the rewards tend to be potentially higher with higher risk investment vehicles.

You can always switch funds in a pension for example to a more balanced fund with lower returns but higher protection from market volatility as you approach the age you are likely to require access to the funds. Bear in mind that you are also likely to draw down from a pension over a period of years rather than in a single big hit.

 

[Darlo1973]

I've 15k sat in a UK (Nationwide BS savings account) making next to nowt.
I won't need the money until I retire (5 years or so), any thoughts on options?

With only 5 years to play with then you want something relatively low risk. Maybe the Vanguard 40 or 60% funds.

Another option is to stick it into your pension to get the tax benefit but that means you couldn't touch it in the next few years if you have an emergency.

 

[Deleted member 26533]

What happens if it has a blip near the end of your 10 year investment and you lose all the profit you made earlier

It's pretty unlikely, but if it does and you don't have the time to make it back...you simply have to sell the asset and realise a loss, or at least a good chunk of paper profits being wiped.

 

[Darlo1973]

What happens if it has a blip near the end of your 10 year investment and you lose all the profit you made earlier

It would have to be a big crash to wipe out 10 years of growth but, yes, it is possible. You can reduce the risk by moving into lower risk investments when you are within a couple of years of needing the money. Even so there is no zero risk investment strategy otherwise we'd all be millionaires.

What is certain is that if you leave your money in cash then there is a 100% chance hat you will lose money with respect to inflation.

 

[The Fullwell Step]

I've 15k sat in a UK (Nationwide BS savings account) making next to nowt.
I won't need the money until I retire (5 years or so), any thoughts on options?

I put some money into the Moneybox ISA a year ago and its gone up 9.8% in that year, seems a canny one if you look at their average returns over the last 6 years.

 

[houghton cut head]

So I assume if you were a 40% tax payer, with 7 years to go before retirement, unless you get really lucky on a high risk ISA, paying into your company pension which you will draw down from and take 25% tax free lumpa, will probably return more? My Company pension is worth more than it was pre-covid, which is a bit of a surprise as I thought it would have taken a major hit, I suppose it probably did last summer but has recovered since then.

 

[Osklen]

So I assume if you were a 40% tax payer, with 7 years to go before retirement, unless you get really lucky on a high risk ISA, paying into your company pension which you will draw down from and take 25% tax free lumpa, will probably return more? My Company pension is worth more than it was pre-covid, which is a bit of a surprise as I thought it would have taken a major hit, I suppose it probably did last summer but has recovered since then.

think you just have to be careful about not exceeding the lifetime allowance (£1.07m), as I believe you can be charged c.55% for exceeding it?

 

[42]

So I assume if you were a 40% tax payer, with 7 years to go before retirement, unless you get really lucky on a high risk ISA, paying into your company pension which you will draw down from and take 25% tax free lumpa, will probably return more? My Company pension is worth more than it was pre-covid, which is a bit of a surprise as I thought it would have taken a major hit, I suppose it probably did last summer but has recovered since then.

If you're a 40% tax payer, then pension is best option due to the massive tax benefit. If just a standard payer & pension is over the personal allowance, then paying extra into pension only has a 5% extra benefit over ISA's. The trade off being that ISA is more flexible so it's a good option to have both.

 

[houghton cut head]

think you just have to be careful about not exceeding the lifetime allowance (£1.07m), as I believe you can be charged c.55% for exceeding it?

That is something I wont have to worry about.

A couple of colleagues with over 30-40 years in have left recently and have reached the limit. Another lucky twat is 57, was going to retire anyway, and has just got VR - £87K, and his pension pot is £870K

If you're a 40% tax payer, then pension is best option due to the massive tax benefit. If just a standard payer & pension is over the personal allowance, then paying extra into pension only has a 5% extra benefit over ISA's. The trade off being that ISA is more flexible so it's a good option to have both.

it would be higher rate, thinking of paying my bonus in to it this year too for the first time, I figured it would give me a year or so worth of additional pension to pay me to live like a peasant for a year, rather that use it to pay off the credit cards for the last years holidays, since the holidays were all cancelled