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Also with vanguard they have a range of products. You can mix your risk and mix what markets you are in. You don't need to put it all into the same fund
https://www.vanguardinvestor.co.uk/what-we-offer/all-products
Sure. I had £500 in last years ISA with Vanguard which to date is up 22% using Lifestrategy 100. I'll probably just move the NS&I pot to that, I'm too risk averse / time and maths poor to be dabbling in anything more than a passive fund.
I've just set up a couple of mixed funds through my current account provider. A "high street" bank but given my risk appetite is low to medium at its raciest, I'm not too fussed about performance over the long term. Anything is better than cash at the moment. Fees were 1% I think.
1% is a little high. But if you get the return then I'm sure you'll live with it.
Specialist fund providers like Vanguard and Intelligent Money are a better bet than banks imo.
I've just checked. Total fees are 0.62%
I started buying stocks very recently via the Freetrade app. GME (did very well), AMC (not well), AAPL (pretty well).
But I’ve also realised that I should put some proper money (~£20k?) into a S&S ISA, rather than have it sitting in a current account losing value. Freetrade can also do this, eg you can buy ETFs. I know there are differences between ETFs and their fees/ tracking accuracy.
Is there any ‘catch’ to using Freetrade rather a more traditional vehicle? The app is currently costing me £10/month for the pro version which is required for USA-listed stocks (like GME or AAPL) although I could potentially just use the free version or the £6/month ISA. Although I’m using an ISA wrapper I don’t know how essential this is since I won’t be troubling the £12,300 capital gains allowance limit.
I think I know roughly what level of risk I want and so on. But what vehicle?
I started a Wealthify S&S ISA this year. I have chosen an ethical investment - something I've always done. So far in 6 months I'm just shy of 3% up. O.6% fee.
(I've a £25 referral bonus for anyone thinking of taking one out...pm me)
Despite a plummeting this time last year, my Standard Life Ethical pension has surged back by 36% in a year. Fingers crossed that continues!
book marked. farting about with freetrade and I'm failing to see the catch.
£100 quid slush money is now worth a whopping £101.56 (after 2 weeks).
I may remortgage and go pro 😮
(joke obvs)
So, a couple of things. First, more details on the NS&I green bonds are out, a 3 year fix although we've yet to see the interest rates which I can't see being very high:
https://www.nsandi.com/green-saving
Secondly, some advice please... I got a "retention" bonus from work paid out in June, enough to fill half my ISA allowance. Until now I've been putting bits and pieces into Vanguard. I have an open Vanguard ISA with £19500 remaining for this year but I'm scared to shove the money in because the markets have been steadly rising over recent weeks.
I kind of know the answer is
a) Is it a long term investment if yes stop worrying and do it
b) drip feed it monthly into the ISA
and maybe even
c) Start with b) then when the NSI Green Bonds are out out the rest in there.
Any sage advice to calm my nerves?
Only you can judge your appetite for risk
If it was my cash I'd stick it in Vanguard and drip feed it in £1k/month split across
S&P 500, new ESG funds and some Life Strategy 40 & 60
The new NS&I Green Bonds interest rate won't be that high. If it's too low nobody will invest but if it's too high the Govt will have lots of issues and they need to be seen as stable.
My guess is 1-1.5% to tempt the public but that is usually achievable with S&S ISAs but with more risk. As mentioned on the CV19 thread many times, as a society we're terrible at communicating relative levels of risk so the Green Bonds will be very popular as they'll be perceived as safe and higher interest.
If it was my cash I’d stick it in Vanguard
Ive never done this ive always use my debit card to deposit, but you can have a cash balance ready to go which is a more instant/same day purchase process - is that right?
but I’m scared to shove the money in because the markets have been steadly rising over recent weeks.
Forget about trying to time the market, all that matters is time in the market.
I fill my ISA each year on 5 April without bothering to look at the state of the market.
Debit card goes in as cash and 'clears' instantly so is same as having cash balance.
Funds do not trade instantly unless you are buying an Exchange Traded Fund, but that will typically have a larger dealing charge and you could pay more per unit. Because they trade instantly there are benefits if you wanted to get out of a position quickly, but that's more typical in institutional investors.
Fund prices are based on the value of underlying assets, ETFs will have a premium / discount depending on the market at that time on that day.
When you buy a Fund typically you get the position 4 days later.
When you buy an ETF it is yours instantly.
@Kryton57 - sorry I meant steadily put it in Vanguard e.g. £1k/month. Not stick it in all and then allocate a bit per month
Let's say you have £5k
Month 1, £1k in Vanguard and the rest somewhere else such as a Marcus instant savings account
Month 2 take chunk out of savings and put in Vanguard
Repeat until done
sorry I meant steadily put it in Vanguard e.g. £1k/month. Not stick it in all and then allocate a bit per month
The interest rate on Marcus is less than the mean gain per month of most stock markets. You'd only be better off if you managed to time it right and have a consistent falling market whilst you drip fed it in. More hassle than its worth esp as you're more likely to be worse off doing it. 10 years down the line you won't notice any difference.
@footflaps - you're probably right when it comes to long term investments but the drip, drip, drip method enables @Kryton57 to vary which funds he invests in and it gives him more control over it as a cautious investor.
Bear in mind that not everyone is confident enough to throw it all in there in day 1
I realise there is a physological / confidence element to it all, but everything you'll ever read (from anyone serious) about investing will tell you, all that matters is time in the markets (with a well divested portfolio). No one can time the market (consistently), so don't even bother trying.
@Kryton57 Vanguard offer some flexible funds where the split between Equities and Bonds is either 20-80, 40-60, 60-40 80-20 or 100-0. Pick whichever ratio you feel comfortable with and you can always rebalance at a later date.
Thanks for the advice. Of course I know most of it but was being anxious about making a decision, for which process the above helped. As per EL Shalimo I put 2k into a Lifestrategy 60, and 1k each into a Lifestrategy 100 and the S&P500. I’m a bit worried about the latter as it seems to have made some all time high gains recently so it makes me nervous it will dip soon, but hey if it’s good enough for Warren Buffet…
Same again next month.
it seems to have made some all time high gains recently so it makes me nervous it will dip soon
Almost guaranteed, but unless you are planning to cash it all in soon, it really doesn't matter at all! The stock markets are a random walk with a long term upward trend, you pretty much always win long term, but in the short term you could be up or down and it will vary a lot.
The NS&I Green Bonds still haven't appeared. Does anyone know when they are supposed to be available?
As per EL Shalimo I put 2k into a Lifestrategy 60, and 1k each into a Lifestrategy 100
£3k in Lifestrategy 73.3 recurring then 😉
Cyclists obsessing over the Capital markets. Could be the perfect contrarian indicator me thinks.
Cyclists obsessing over the Capital markets. Could be the perfect contrarian indicator me thinks.
I think it's more an age thing, you get to a certain age (in my case 40) when things like pensions / investments go from being never thought about to never not being, at least in the back of your mind.
The NS&I Green Bonds still haven’t appeared. Does anyone know when they are supposed to be available?
Last thing I read was Sunak was having a fit over it for some reason, delaying the launch.
Almost guaranteed
It did and I bought at the bottom of the S&P500 dip this week, I got lucky as I had a bit of cash waiting to be invested.
So er, anyone else buying in the massive dip? Blimey..... 8|
That’s not a massive dip lol.
Worth binging a few quid in mind.
It makes no rational sense to worry about it however it is impossible not to :-/
Yep. I've just transferred 3 final salary pension schemes into my SIPP so taking advantage of the froth being knocked off the market. I'm around 40% equities at the moment, mainly in low cost index trackers as my core but have a few satellite funds for things like small cap, fintech etc. I plan to move to 60% equities but will wait to see what happens over the next few weeks.
So er, anyone else buying in the massive dip? Blimey….. 8|
It's been absolutely nuts hasn't it. My stuff went up 10% in about two weeks. On Wednesday I was 37% up on last year.
Desperately want to invest some more but not until the market drops a bit...
I can buy options in Kingfisher group through work.
You drip in monthly then exercise the option at 3 or 5 years
Instant money back if necessary in full
Price is set on an average week last month, less 20%.
So you can buy the shares in 5 years time, at last months price, less 20%, and the shares are yours to do what you want with.
Up to £250 pcm whicj would accrue very nicely over time
Already in vanguard, Scott mutual, equitable, for 100k plus a serps related ppp at 50k.
Thpughts.....
What dip?
Those company schemes (all the ones I have seen) are a no brainer.
It’s worth shopping around on platform fees - for example some of Vanguard’s products are actually cheaper to buy and own (annual fees) on Hargreaves Lansdown than going direct via Vanguard.
Thpughts
As surfer says,just get it done.
It heads you win, tails you don't lose.
It's yet another example of how the UK operates a policy of to those who have shall be given more
I canceled the last to I dud at current employer as the share price tanked, and just got the 3 grand returned to me each time.
This last batch is currently 125% up so I'm hoping to get a stack from it.
Singletrackmind - it’s worth factoring the compounding effect and risk of buying shares in your own employer.
On the risk front - your income, pension and investments are all in the same basket - if Kingfisher has a bad run you could land up having your investments tied up for 3-5 years and come out no better off or at worst lose the lot.
On the compounding effect - there are plenty of relatively low risk actively managed funds that spread the risk around different companies in multiple sectors and still return 10-15% (or more) a year.
Obviously that’s not a guarantee of future performance but compounded over 3 or 5 years the £250 turns into £380 / £502.
I’d personally put the £250 a month into an actively managed scheme in an ISA - so any gain can be withdrawn from a tax free wrapper.
The employee share scheme is typically subject to tax on any gain and if the shares are underwater at the end of the term you may well get your initial investment back but compound inflation will mean it’s worth less in real terms.
The employee share scheme is typically subject to tax on any gain
Not true. If you keep them for 5 years you usually don't pay tax plus you are buying them out of your gross income which could save you paying 40% tax on that money plus the 20% discount. If it was me and I was working for the company for the long haul I would invest for 5 years then in year 6 crystalise the investment from year 1 into an ISA to spread your risk and repeat every year.
On the risk front – your income, pension and investments are all in the same basket – if Kingfisher has a bad run you could land up having your investments tied up for 3-5 years and come out no better off or at worst lose the lot.
Try reading my post again , but slower this time.
I have 5 x PPP , my risk is hugely diversified within each PPP I self select across funds, which have hundreds of constituent parts.
If the shares tank I can simply cash out and ask for all my money back , in full , at any time , not in 5 years. The risk is zero capital gain over term, much like NSI. so capital errosion due to inflation and fiscal drfit
Company share schemes are a gift. I was lucky to share a train commute in my first week of a new job ages ago, with the company secretary. He explained how it works and being an option, you cannot lose. So here I am 30 years later with the same shares I bought then, just reinvest the divi. Compound interest is your friend.
The above post 're risk avoidance is spot on, the company shares are blocked for x years, so sell free of tax and recycle the money back into the scheme, or buy something else and put new money into the scheme.
For me even when I was really skint I kept investing, I think the deal was for every 1 GBP I put in, they put in 3, so tax and employee benefit. Some employees with long service were sitting on company shares of 100s k.
OP. Be cautious about some of the responses being given. People are clearly mixing up different schemes.
Does your scheme buy the shares pre or post tax?
Shinton said
plus you are buying them out of your gross income which could save you paying 40% tax on that money plus the 20% discount. If it was me and I was working for the company for the long haul I would invest for 5 years then in year 6 crystalise the investment from year 1 into an ISA to spread your risk and repeat every year.
I think he is mixing this up with the other type of employee share scheme
I'd be amazed if this scheme was gross income.
Also you can't crystalise the 1st year only in year 6 shinton. You "crystalise" the whole lot ( or none of it) at exactly the same time.
Again you're mixing it up with the 9thrr type.
All IMHO of course.
This is on top the Kingfishre Penson scheme
I pay 8% of my gross salary , which the company add 14% to.
This is the maximum the company will add , which is great. The drawback is its based on your contracted hours (20 ) at sub £10 p/hr wages so roughly £65 from me and £110 from Kingfisher.
If i do more hrs my pension conts stay the same
Yes, I dont earn very much .
NO , hardly anyone overpays into the excellant pension scheme
Afaik no-one is in the existing share save scheme
They simply cannot afford to do it as rent and bills use up 100% of their income each month.
Been a while but share save where I worked was pre tax (with 100% extra matching shares, whoop!)
Have to hold for 5 years to avoid being taxed as an earning when selling.
Could be sold from the scheme free of CGT but lost that if transferred out of the scheme into own name then sold but...
...you can transfer shares from a scheme into an ISA but only up to the annual sub limit. TBH Doing this annually would be a ballache unless you're maxing out the ISA.
https://www.gov.uk/tax-employee-share-schemes/transferring-your-shares-to-an-isa
If you're still not sure then check with your payroll or HR department. Your broker should be able to advise on company scheme to ISA transfer process.
The NS&I Green Bonds are now available
0.65% fixed for 3 years
Pretty crap really, so crap they quietly released them yesterday
https://www.nsandi.com/interest-rates