comments:
www.EQi.co.uk support SAYE & flexible S&S ISAs and they might be the best bet as they're part of SAYE provider Equiniti and they promote SAYE transfers quite regularly. I know that Charles Stanley Direct1 and Barclays Smart Investor2 also do. The important thing is getting all the SAYE shares into your ISA and selling them. Once you've done that, you can transfer the ISA anywhere. It's not meaningful to ask whose S&S ISA is the "best performing" - most all of investing is stocks and bonds, and mostly the allocation between them determines the returns you get. A portfolio of 60% stocks and 40% bonds is going to perform about the same as any other portfolio of 60% stocks and 40% bonds, regardless of the providers. A portfolio of 80% stocks and 20% bonds will outperform a portfolio of 20% stocks and 80% bonds over most 10-year terms, but it will have more volatility ("risk"). If you can leave your money alone for 20 years and want the best returns then you just invest a tracker of a world stock index - 100% stocks. If there's a stockmarket crash then that might lose 30% or 50% of its value - if that might make you feel bad or panic, if you'll struggle to leave the money alone for the remainder of the 20 years, then you should buy a fund of stocks and bonds instead (a multiasset fund like Vanguard's Lifestrategy Global or Blackrock's Consensus). Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
Most all of investing is deciding what allocation of stocks vs bonds meets your needs. A portfolio of 60% stocks and 40% bonds is going to perform about the same as any other portfolio of 60% stocks and 40% bonds, regardless of the providers. A portfolio of 80% stocks and 20% bonds will outperform a portfolio of 20% stocks and 80% bonds over most 10-year terms, but it will have more volatility ("risk"). An asset class can out- or under-perform for a decade at a time, so you can't look only at recent returns, you must look at the asset class as a whole. The most important thing you can do to secure a more comfortable retirement is understand what you're invested in - depending on your age, choosing more appropriate funds could easily double or triple your pension at retirement, based on continuing the same contributions. Do not choose a fund just because someone says on here, "use this one, m8" - these people will not be around to apologise or compensate you if they get it wrong. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
You're pretty close to being able to afford a £200,000 home even with a £30,000 a year income. I don't think you need an advisor for sums like this - I'd even argue it would do more harm than good. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
If you're able to leave the money alone for 10 years then you're really better off investing it in the stockmarket. You'll very probably be better off if you leave it invested for 5 years. But you should read a book first, so you understand what you're investing in and how long it can be expected to take the market to recover if there's a crash. The worst thing you can do is follow my recommendation here, invest it all in VWRP and then panic and sell when the inevitable stockmarket crash happens. But you need to confront this at some point in your life, because 90% of people have self-invested pensions, which are basically the same thing as S&S ISA investing (just different tax treatment). The way to be wealthier over your life is to learn about investing earlier, and get your money invested earlier so it's generating returns for longer. You won't get rich quickly but it could easily be the difference between retiring comfortably when you're young and still having to work when you're old. When I was your age I was a plonker who didn't know anything and I wish I could go back in time and tell myself this. I would argue that this is the most important lifeskill you can learn because nothing else you can do (other perhaps than marrying well, or just having rich family in general) can earn you so much money over the course of your whole life for so little effort. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
If you want to maximise your money, invest in equities for the longterm. Vanguard PDF: Dollar-cost averaging just means taking risk later Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
It doesn't make sense to keep large sums in cash if you won't need the money for several years and you're prepared to take investment risk. But you should understand what you're getting into. You say "the interest id gain in a year would likely only just pass what it could potentially get with just 20k in a strong ETF" - yeah, but what if it doesn't? What you're kinda doing here is FOMO - you're looking only at past investment returns and thinking, "yeah, my money could double within 5 or 10 years". It's like those cartoons where the character gets dollar signs in their eyes - I don't meant this as a criticism, because we all do this to some extent. Between fall 2007 and spring 2009 stockmarkets worldwide lost 50% of their valuation, and took years to recover and you need to consider how you'd feel if that happened to this money. If you can stick the money away and not touch it for a 15 years then you're certainly better off with it invested in S&S. But averaging in £1000 a month or £3000 a month or whatever may make you feel more comfortable. Vanguard PDF: Dollar-cost averaging just means taking risk later I really recommend you get stuck in to good deep resources about investing, instead of dithering about asking what other people here think. Most people are morons, and probably most the people commenting in this subreddit have never read a single book on investing. Understanding investing better will give you confidence to dictate your actions. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
Very risk-averse. Personally believe socio-economic conditions will worsen over the long-term. So I want healthy margins in my planning if possible. I would regard this as a high risk strategy. Hardly anyone, walking down the high street, understands investment risk. Most people commenting on this subreddit don't understand investment risk. How many books have you read on investing that you can judge this better than everyone else? My grandmother was born around 1905. I find that the telephone had been invented and commercialised then, but 90% of homes don't have one. People went to the post office and sent telegrams, which were transmitted by morse over telegraph lines (they were very short messages because you paid by the letter) which were delivered to the recipient by a boy on a bicycle. I find that my gran would have been a teenager before she was able to listen to music on the radio. My parents grew up during WWII in Glasgow and Manchester - horse and carts were still widely used for deliveries, and my parents were probably teenagers before saw their first orange or banana. WWI, WWII, the Korean War, Vietnam and the Cold War, Kuwait, Iraq War I, Iraq War II, Afghanistan twice too, and now Iran to round things out. Television, personal computers, satellite TV, mobile phones, the internet… if my granny had invested in General Electric, Ford and Standard Oil in 1920's - none of these events would have wiped out her investments, would they? If my gran had invested £10 in "index funds" in 1920 then that investment would today be worth £63,330. If the world goes to fuck then I don't know why you want to own bonds - if you google "ottoman bonds" then you can find them for sale on eBay; you might pay £200 or £300 for these government bonds because collectors buy them as a curiosity. These were people's life savings once. I don't know why you'd think that was safer than owning actual companies. Imagine: it's january 2020. I come up to you and say: "In the next three years, we will have a global pandemic that will cause a 33% market crash and right now is the peak before this crash. Also we will see the highest inflation that we've seen in 40 years which will force the Fed to raise rates aggressively which causes another 25% slump in the market. Also, war will come to Europe and China will have a complete lockdown, which will feed the inflation and fear. Also, we will see a series of huge bank failures. Would you invest at the January 2020 peak if I told you all that? Probably not. Yet if you put 100k in the market at that point, it would be worth $147,000 today 9in August 2021], for an average annualized return of 11.4%, well above the historical average[source] You want to be investing like a vampire. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
I haven't read all the other replies, but some actionable things: Move money from ISA / cash savings to pension (SIPP or workplace, depending) and you get a 6.5% bonus just from doing that, even if you only invest in money market funds (which pay the same as bank interest). The amount you can do the above is limited only by your income - i.e. if you're earning £47,000 this year then you can only put £47,000 (gross?) into your pension. I would put £20,000 or £30,000 in this year and then it will be netted up to £25,000 or £37,500 respectively, as the SIPP provider claims basic rate tax relief for you. You can probably exit the 5-year fixed term ISA early, with a small penalty - may well be worth doing; probably the penalty won't be much, especially if you do it ASAP. Keep some cash savings to cover yourself against emergencies, but ideally move all your cash savings into your SIPP the last week of one tax year and then start drawing from it the first week of the next tax year. Understand what you're investing in - watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
I’ve looked around, and many people seem to suggest that an All‑World fund is the best option for a SIPP pension because of the diversification it offers. I already hold an S&P 500 fund in my ISA, but I’m not sure whether it’s sensible to invest in the same ETF within a SIPP. The subreddit wiki has a section on this: https://ukpersonal.finance/index-funds/#What_about_the_S_P_500 If your goal is to buy a big bag of diversified stocks, why would you chose only stocks from a single country? If you want to do that, you could choose the FTSE 100 or the Nikkei index. Fund factsheets are confusing. If your provider offers index funds then those are pretty much guaranteed to get (near as dammit) the same returns as the index - the market average. The factsheet will typically have a description line and, for an index fund, it will say something like, "the goal of the fund is to track the index" or "track the benchmark". Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
Most all of investing is deciding what allocation of stocks vs bonds meets your needs. A portfolio of 60% stocks and 40% bonds is going to perform about the same as any other portfolio of 60% stocks and 40% bonds, regardless of the providers. A portfolio of 80% stocks and 20% bonds will outperform a portfolio of 20% stocks and 80% bonds over most 10-year terms, but it will have more volatility ("risk"). You can see this for yourself by comparing multiasset fund like Vanguard's Lifestrategy or Blackrock's Consensus - by looking them up online and comparing their charts. The returns of Vanguard's Lifestrategy 80 may not be exactly the same as Blackrock's Consensus 80 (Blackrock's allocation is often not exactly the same as the headline number, and they tend to include small amounts of other asset classes too, like gold or REITs) but they will be closer to each other than either is to the Lifestrategy 40 or Consensus 40. I'm not saying what allocation is right for you here, I'm just trying to give you some background on how asset allocations are chosen. You shouldn't be choosing a fund just because all the plonkers here think it's great - the people in this subreddit who say "yeah, VWRP for life" will not be around to apologise or compensate you if you lose all your money. Whereas the service you were paying SJP for was essentially that they chose an allocation that they thought you would be comfortable with, and they accepted some liability for this decision. Your advisor was a qualified professional who knows more about investing than most people on this sub, and they asked you questions about your needs and circumstances, about your goals and family, which they should've taken into consideration when choosing that. Between fall 2007 and spring 2009 stocks worldwide lost 50% of their valuation, and took years to recover - that's the risk of buying VWRP or FWRG (100% stocks)., and you should think about how you'd feel if that happened to your pension. The obvious thing here is to chose the same asset allocation you had with SJP, approximately at least - use one of aforementioned multiasset funds - and then take a breath, learn more about asset allocations and see if that's the right allocation for you or whether you do feel that 100% equities (or some other high allocation) is right for you. I really recommend you watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Smarter Investing is really easy to read, really clear and surprisingly comprehensive - if you spend a few days dithering about what fund to choose or doing further research here then you're better off just reading Smarter Investing instead. I didn't read it soon enough, and it was what made everything "click" for me, after coming on this subreddit every day for months.
If you want to FIRE then you need to commit. It's not realistic otherwise because you're going to need an investment pot of £1,000,000 or more to maintain your current lifestyle. It's bonkers to say you'd take a big tax hit on withdrawals from your pension - that implies pulling it all at once, and why would you do that? As long as you keep your withdrawals below ~£60,000 a year you will continue to pay tax at a rate of ~15% - it's better to maintain your mortgage than to pay higher rate tax. Or you can use your tax free lump sum to pay off your mortgage. Paying tax at 15% is better than paying tax at 40%. It's as simple as that. Do you want to FIRE or not? If this is your goal than you put all earnings over £50,270 into your pension, so you pay no 40% tax. Then you put £4000 a year into your LISA. Now stop and think about it. Do you have any more spare cash to save? Use an S&S ISA. Build a spreadsheet to project investment returns and retirement spending. When do you think you might be able to retire? You can access a SIPP from age 57. FIRE stands for financial independence, retire early, emphasis mine. There's no such thing as easy money, outside of inheritance or the lotto. When you learn about FIRE, I think most people are probably at the starting line of a marathon of 20 years or more. It's not gonna be next week, sorry. You have to commit to the long haul, and tax efficiency (i.e. pension tax relief) makes a significant difference over that time. Sometimes posts here about FIRE - the early part isn't realistic. Sometimes, realistically, they're about getting on the pension train so that you can retire comfortably in your 60's. I haven't done the maths on your situation, so I can't say for sure one way or the other. But it's well understood that pension is most tax efficient for earnings over £50,270, and LISA is the best S&S investment account on basic rate earnings. If this is actually about retirement then you can't afford to care about "accessing the money early" until you've first maxed those most tax-advantaged accounts. If you want to retire early then those are the priority because they cover you from age 57 on. Any extra you put into S&S ISA is your early. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
How old are you? What's your pretax annual salary? What's your expected future salary? You can invest in the same things in pension or S&S ISA (watch Lars Kroijer's short video series and read Smarter Investing, do both) so the choice between them (and also consider S&S LISA) is a question of tax efficiency. You can move money from S&S ISA to SIPP at almost any time and and have more money - for basic rate taxpayers it's an effective bonus of about 6.5%. The tax relief is much more attractive if you're doing this as a higher rate taxpayer, on earnings over £50,270. Most working homeowners should have a mortgage and aim to pay it off around the time they retire and not much before - this is how you retire earlier with more money. Paying off your mortgage reduces your opportunities to invest earlier and generate investment returns for longer.
The parts you write in your 2nd, 3rd and 4th sentences are very good. I object to the concept of "risk levels" like 5/7 because what does that even mean? Well, you explained it already. The Vanguard Global All Cap is just one tracker of a world index, and the point of a world index is to capture the average returns of the world's stockmarkets. So all world indexes are about the same: https://imgur.artemislena.eu/p1LN35X.png The other less risky major asset class is bonds - most all of investing is deciding what allocation of stocks vs bonds meets your needs. A portfolio of 60% stocks and 40% bonds is going to perform about the same as any other portfolio of 60% stocks and 40% bonds, regardless of the providers. A portfolio of 80% stocks and 20% bonds will outperform a portfolio of 20% stocks and 80% bonds over most 10-year terms, but it will have more volatility. Between fall 2007 and spring 2009 stocks worldwide lost 50% of their valuation, and took years to recover, so that's the risk you take when investing 100% in stocks. As you say, stocks will recover in due course, but people don't always act without emotions when they see their portfolios losing half their value, so you should think about that a bit. The people on here who are giving you attaboys for choosing this fund will not be around to applies or compensate you in the event of a stockmarket crash. Your risk appetite is your risk appetite and theirs is theirs. It's ok to choose a less risky allocation (or, equally, a more risky one) just so long as you've thought about it. Multiasset funds like Vanguard's Lifestrategy Global allow you to hold stocks and bonds in a single fund. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
A thing I post here a lot is that most working homeowners should have a mortgage and aim to pay it off around the time they retire and not much before. I say that this is how you retire earlier with more money and that paying off your mortgage reduces your opportunities to invest earlier and generate investment returns for longer. It is not inherently better to have a mortgage of £100,000 and £100,000 of investments than a mortgage of £200,000 and £200,000 of investments. All finance depends on needs and circumstances, but the latter is better for most people in the first half of their working lives. The current top comment is a bit knee-jerk - it's like the reaction a parent might make when their kid shares that they're planning to spend their JISA on a brand new BMW, when the parent was thinking of the money as a reliable secondhand car and the deposit on a house. It's not wrong. it's just not thoughtful either. And I guess the reason for this reaction is that your question seems a bit impulsive. My concern would be how did you allow yourself to get so much equity in your house in the first place? Most working homeowners should have a mortgage and aim to pay it off around the time they retire - that's something you should have been planning from the beginning. You should have had a bigger mortgage from the start, and been investing in the stockmarket all along. You should be using pension and S&S ISA for tax efficiency. Saying that you're thinking of investing in the S&P 500 is a red flag too - it stinks of "I saw a TikTok about this and it seems like a really good idea". Why would you have no international diversification? Why would you invest in only US-listed companies? Surely a tracker of a world index is a more suitable equity allocation? The S&P 500 can underperform the rest of the world for years at a time and has also sometimes had zero returns for 20 years at a time, in inflation-adjusted terms. So this looks impulsive and maybe you're going to liquidate all your money and think that was a bad idea if the market takes a shot tomorrow, and you shouldn't be doing this kind of investing if you're not in it for the next decade or two. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
At your age you will likely be able to double or triple how much money you have by retirement by reading a book, choosing more appropriate funds than the default and doing nothing else. The value of understanding this stuff is vastly underestimated by most people. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
If you buy a fund that tracks the world index then you're buying shares in the largest 1000 or 5000+ companies in the world. People have been saying that the stockmarket is a scam since time immemorial, but look at the chart of any stockmarket index over the last century - over any 20 or 30 year period, it has always gone up. If you buy an index fund then you are guaranteed to get the same returns as the index. The smart thing to do is to understand what you're investing in - don't just do things because other people tell you it's a smart thing to do. I don't know if you'll be able to get a copy of Tim Hale's Smarter Investing affordably in the US, but Ben Graham's The Intelligent Investor remains pretty good; well, it's excellent, but not ideal as a first introduction to the subject and its language is a bit dated).
Would I be better off with a free SIPP, and just put £100 per month away into Vanguard All-World Index (VWRP) instead? Yes, if this suits your risk tolerance. Or you could use a multiasset fund like Vanguard's Lifestrategy Global or Blackrock's Consensus to get 60:40 or 80:20 stocks:bonds. Between fall 2007 and spring 2009 stockmarkets worldwide lost 50% of their valuation, and took years to recover.. If you really have 35 years until retirement (how old are you!?) the market will surely have recovered by the time you need the money, but you need to think about how you'd feel if that happened to your pension - it can be uncomfortable even if you "know" you'll "get the money back" in due course. Good investing doesn't need constant tinkering with, but the more you know the better you can weather these kinds of storms. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both. When you have a SIPP alongside an NHS pension you have to keep an eye on the latter's input amount, so that your SIPP contributions don't cause you to exceed the annual allowance.
I would invest in pension, S&S ISA and GIA. Using a multiasset fund like Vanguard's Lifestrategy Global or Blackrock's Consensus - 60% or 80% equities, considering what you write. There are many here who use 100% equities at this age. IMO it's a bit dangerous being too conservative with your investing - that just ensures that your money will earn very low returns. Being a landlord is not low risk and the returns are crap, so I would argue it's the worst of both worlds. But you can't compare renting the house out, or buying a different house to rent out, with other investment options if you don't understand those investment options. And an hour with a financial advisor will not adequately inform you. Even if you do decide to go with a financial advisor to :take care of things for you" (unnecessary for many people) then reading a book will allow you to use the time much more productively and probably see you getting much better returns. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
If you want to invest in S&S then invest in S&S. Which is what the JISA should be invested in, considering the timeframe involved. Use a bare trust account, sell in such a way as your gains are below £3000 a year and you will stay below the annual allowance for capital gains tax. Then put that money into the JISA each year. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
You do your stockmarket investing in ISA, pension and GIA. You can invest in the same things in each, and you should almost always use pension before GIA. You can buy Vanguard funds from any broker. IWeb Scottish Widows is amongst the cheapest big / reputable / name brand for ISAs and GIAs. No annual fees, regular monthly investing is now free, and it's part of Lloyds-Halifax. Not sure how they're placed for self-invested private pensions - check Monevator's broker price comparison table. Gilts you buy in a GIA. Look for low coupon ones to reduce your tax bill - coupon are taxed as interest, whereas capital gains are tax free; if you find a low coupon one then you will be buying it at a discount to par. Yesterday's thread explains. Investing is about taking risk to grow your wealth, whereas diversification is about finding risk that is uncorrelated to your main driver of investment returns. In simple terms, you accept the fact that your investments can sometimes go down - if you can find something that goes up when your stocks are going down, and its downs are when stocks are up, then the combined portfolio has less volatility. I don't think you're really talking about diversification here - your Vanguard target date fund does that for you - you need to divide your money into "pots" of what you'll need soon and what you can leave alone for a long time to grow. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
You should read books about investing if you're risk averse - being informed will give you the confidence to stick with the programme. People on here will give you cocky and flippant answers, and may say things that are wrong or misleading. They may do this even if they know enough to manage their own investments competently, or if their answers are "accurate enough" for their own purposes. I'm a little curious what you mean when you say you're "risk averse" and why you say it about yourself. There may be ways that a sensible practitioner can mitigate risk in more extreme sports, but investment risk is not the same as base-jumping risk. I honestly believe that if you understand investing to a little depth then you won't care about losses in the same way, because returns are inevitable with patience. Even if you want to pay a financial advisor, reading a book will ensure you get better value from their time and you'll probably get better returns too. But an adviser will likely charge you thousands a year to manage a sum of this size, when most people here can do it quite happily themselves. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.
Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing. Do both.