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Yeah sod that. Better than a cash isa but we'll below inflation. I'd rather have premium bonds.
so crap they quietly released them yesterday
I suspect they'll sell millions worth of them. Standard NS&I bonds are poor value but still sell like hot cakes.
Not only a poor return but the investment objective is to fund the government's green programme which isn't exactly world beating. There must be better ways of investing in worthwhile green schemes AND getting a competitive return.
A lot of people put money in the Income Bonds when the rate was 1% and better than most other regular savings products out there. A couple of months later they dropped the rate to 0.01%
🤦♂️
Not only a poor return but the investment objective is to fund the government’s green programme which isn’t exactly world beating.
If it's anything like their Covid testing / PPE contracts it will just involve giving contracts to their mates who then piss it up the wall....
I wouldn't be in a hurry to lend anything to this lot to invest.
The NS&I Green Bonds are now available. 0.65% fixed for 3 years
Wow, that is poor. The instant access Marcus account will be above that soon I suspect. Thanks Boris, but you can keep that.
There must be better ways of investing in worthwhile green schemes AND getting a competitive return.
Many.
Edit: Nationwide currently offer in-credit interest of 2% on first £1500. You can have 5 current amounts with them. They're pretty good ethically.
Below are ones we've used. The ones we have currently (S&S ISA's) are all doing well.
I've an ethical pension, it's averaged around 14% annually or the last 10 years, about 8% annually for the 5 years before that. This year currently (despite dip this month) its up at 18%+ and still got two months of the year left.
And
https://www.triodos.co.uk/ethical-isas
And
https://www.wealthify.com/ethical-investing
And
I’ve an ethical pension, it’s averaged around 14% annually or the last 10 years, about 8% annually for the 5 years before that. This year currently (despite dip this month) its up at 18%+ and still got two months of the year left.
That is extremely good!
Any ideas what to increase in right now? I cashed out some shares just before things tanked in a big way. Figure just topping up existing sustainable equity funds is probably a safe bet, unless there's any tips.
Any ideas what to increase in right now?
If this isn't a big wake up call to Europe to go much bigger into energy efficiency and renewables, then I don't know if there is any hope.
Yeah I'm into that already things aren't pretty just now. Probably a time to top up right enough.
Beware a potentially very stupid question, but:
I currently sacrifice 5% to a work pension, and my company adds 3%. On top I pay £200 into a private S&S Vanguard pension.
I can choose to increase to sacrifice 7%, and the company will go up to 5%. Even if I had to lower my private pension contributions, that’s more tax free and more free money… right?
Just checking I’m not going mad and this is a better thing to do.
Yes it should be win win, extra employer contribution which is free money and you should save the NI contribution on you contributions through sacrifice rather than paying employee contributions. Income tax saving should be equal - private pensions add basic rate to whatever you pay in, if you're a higher rate tax payer you'd have to claim the difference through tax code or tax return
I can choose to increase to sacrifice 7%, and the company will go up to 5%. Even if I had to lower my private pension contributions, that’s more tax free and more free money… right?
Yes you get the extra 2% from your employer which is free money.
Cheers, I thought as much but was tying myself in knots with well, idiocy quite frankly.
Yes
Everyone loves free money
Standard rule - max your employee pension contributions to get the max out your company!
Do it!
you get the extra 2% from your employer which is free money
I agree, but you may also want to consider whether your private pension or your employer pension will grow faster. If you can choose what to invest your private pension in, you may well get better growth, as the trustees of the employee pension will be risk averse. Also, what will happen if you change employer (I know things are a lot better there than they used to be).
Also, don't forget that your company might subsidise your pension admin fees (mine does), so that's another aspect/cost to factor in. It may be that your private pension fees are quite a bit higher than the company scheme
I agree, but you may also want to consider whether your private pension or your employer pension will grow faster.
Given you get a 100% uplink on your extra 2% contribution, it would have to be truly terrible to not grow enough to still be quids in. As for which scheme does best, that's pretty much pot luck. A company scheme will probably be a bland mix of trackers and bonds - which is as good as any selection long term.
Also, what will happen if you change employer (I know things are a lot better there than they used to be).
Less than £18k you can take the lot as cash (IIRC), more than that you can transfer it very easily into a SIPP etc.
So.... markets continue to fall in the main, and as of today I've lost about 25% of my pension fund since January as it currently stands.
Are we trusting that over the next 10 years it'll grow again? I'm sitting here with £400 to put somewhere and am not sure if it should go in my Vanguard ISA or NS&I green bonds. Without tax being charged, it feels a close call except with the former I could stand to lose. Yet I could also gain more than 1.3%aer of the former...
Are we trusting that over the next 10 years it’ll grow again?
Yes.
You're looking at this completely the wrong way.
The fact that it has dropped 25% just means that you will get 33% more shares for your £400 compared to what you'd have got if they hadn't fallen.
#look on the bright side
All that matters is thd price you buy and sell at. The price has fallen just as you're about to buy. Happy days.
( the above should be taken with a large pinch of salt)
I know, time in the market etc.... and theoretically today I'm buying relatively cheap compared to earlier in the year.
Its the recent loss thats makes me cautious I guess.
successful long term investing for the amateur is as much about your ability to tune out short term noise and stick to your long term game plan.
As long as you're investing in a low cost diversified portfolio (suitable for your timeframe and tolerance for risk) as above - your average buy price is the only thing that matters, and by buying monthly you'll be buying when the markets up and down. Over a long enough time frame, world markets have always gone up.
Another way to look at it is these dips are precisely the thing that drives your 7% PA average return of the MSCI. AKA "The equity risk premium" - if equities weren't volatile / dropped significantly now and again - you wouldn't earn the long term returns - significant falls aren't a fault of the system - they are part of the system.
There are a number of excellent web resources for the amateur that explain all this stuff and should help you remain calm when things are falling.
Out of interest- whats your pension invested in to fall 25% since Jan? Seems high. Tech / growth is down heavily - but world indices are not. Guessing theres some long bonds in there?
So…. markets continue to fall in the main, and as of today I’ve lost about 25% of my pension fund since January as it currently stands.
Yep, all a bit depressing!
NB I've seen bigger losses on my pensions eg right at the start of Covid things really tanked before bouncing back and then rising rapidly for 18 months.
Are we trusting that over the next 10 years it’ll grow again?
Yep, not sold anything yet - just stopped looking as it was getting depressing.....
But to be fair to the markets, we have a war with a nuclear super power and the worlds manufacturer (China) grinding to a total halt due to Covid - so you wouldn't expect markets to be peaking under those circumstances.
What's Warren Buffet's famous saying - invest when others are fearful.
Out of interest- whats your pension invested in to fall 25% since Jan? Seems high. Tech / growth is down heavily – but world indices are not. Guessing theres some long bonds in there?
The one I'm referring to is an HL SIPP created by my former employer with 90% invested in Bailie Gifford Class B accumulation manage plan - we know BG have had issues recently. Obviously there's no point moving that right now.
/ goes off to buy some Bailie Gifford Class B
So…. markets continue to fall in the main, and as of today I’ve lost about 25% of my pension fund since January as it currently stands
Mine lost similar.
S&S ISA's, down about 15%.
However, pension is coming back (wobbly, but it's getting there) and is abou 7% down on last year.
ISA's continue to slide.
In it for the long term. 🤞
BG have had some issues recently - really?
SMIT has fallen due it's composition but they run a multiplicity of funds which have fared no better or worse than their competitors.
SMIT has fallen due it’s composition but they run a multiplicity of funds which have fared no better or worse than their competitors.
All my BG funds are currently the worst performers in my portfolio, which wouldn't be so bad if it weren't for SMIT being my number 1 holding by a huge margin....
Even my "safety" Isa is taking a hit but I'm getting more shares in % terms for my monthly contribution.
Question though already have my company pension maxed out as the employers contribution is generous but I won't be there when I get to retirement age so would it be beneficial to open a private pension but with only a small contribution by myself.
Currently have some
Cash
Couple of Isas
Saving bonds with good returns (for the grandkid if and when due to complicated family stuff)
Some shares
Mortgage is nearly done (while everyone was drinking I was working 2 jobs).
Crypto for giggles.
So £100 a month into a H/L type pension for 17 odd years?
I could save that 100 a month and have a wonderful holiday while I'm not dribbling into my bib at the nursing home.
PK13 - depending on your marginal tax rate AVC’s *can* be more beneficial than a SIPP (as long as your work place fee’s and investment options are satisfactory)
If you salary sacrifice any AVC’s as a lower rate tax payer you will save ~34% on contributions (tax and N.I) - if you pay in to a SIPP as a lower rate payer the saving is only 20%.
If you’re higher rate the difference is much lower, 42% thru salary sacrifice or 40% into SIPP.
Something to consider
Question though already have my company pension maxed out as the employers contribution is generous but I won’t be there when I get to retirement age so would it be beneficial to open a private pension but with only a small contribution by myself.
Assuming your company scheme is money purchase and not final salary wait until you leave then transfer to a low cost SIPP. You can't contribute into a SIPP if you are already 'maxed out' if that means you are already hitting the £40k annual allowance.
My low cost index trackers aren't performing too badly compared to others and I'm now a big fan of passive tracker funds.
It's not final salary so I'm moving it when I leave into a low risk pot.
I've maxed out my salary potential in terms of tax. Share scheme is also being used but I'm cashing that in next year. (Maybe)
Both my wife and I need to have a proper sit down tbf her pension pot is shockingly bad she is relying on me dieing at work to cash in the work insurance 😉
Other options including never retiring fully unless heath issues get me and use that income as a substitute.
Thanks both
*Edit when i typed maxed out I mean financialy in relation to my income ie what I can afford to put in not the limit.
Company pension is also underperforming since a corporate takeover.
So £100 a month into a H/L type pension for 17 odd years?
I've done similar and a Vanguard SiPP with a the relevant Target Retirement fund is working well for me on that. Very cheap.
For non professional investors using funds tends to be the safest way of investing.
However the biggest and absolutely crucial thing is what the fund actually holds and what their strategy is.
It’s really important to do your homework and realise that with more reward comes more risk.
Taking responsibility for your investment and decisions is very important.
Nothing that pays above average return has below average risk. Diversification is key to managing risk.
Unfortunately people often believe there is some secret in investing that will magically produce huge returns.
This is why we often see investors blindly buying useless assets simply following a rising price trend. Unfortunately for them such rallies in non productive assets always end in sudden and unforeseen corrections which can be very severe.
What a load of rubbish. The safest way of investing is to do your own research, pick your own concentrated portfolio of stocks, and manage your own risk. Why on earth would letting some random fund manager do it be safer? Have your never heard of Woodford? Have you not seen the performance of ARKK? How are you gonna outperform the market when the fund you have bought owns most of QQQ (and still manages to underperform it 🤣)?
As to the recommendation of buying for the long term and riding our the dips - try asking some older folks how that worked for them back in 1999...
“What a load of rubbish. The safest way of investing is to do your own research, pick your own concentrated portfolio of stocks, and manage your own risk. Why on earth would letting some random fund manager do it be safer? Have your never heard of Woodford? Have you not seen the performance of ARKK? How are you gonna outperform the market when the fund you have bought owns most of QQQ (and still manages to underperform it 🤣)?
As to the recommendation of buying for the long term and riding our the dips – try asking some older folks how that worked for them back in 1999…“
Without wanting to turn this into an internet Willy waving fest - that’s a load of tosh.
The data is clear - the average fund manager doesn’t beat the market after costs, and it’s incredibly difficult for a DIY stock picker to beat the market over the long term too. Most people would be better accepting the average returns the market will give you for 15bps per year.
As for 1999. Anyone that owned a global index fund and carried on purchasing monthly without panicking will be well up by now, Massively so. The data is out there - buying an index fund monthly and holding for the long term works.the longer you own, the greater the probability of a successful outcome
Many of the biggest and most popular funds are index funds, that’s why there has be a huge rise in the number of ETFs (exchange traded funds). Fees are generally lower and that makes a big difference in low yield markets.
The idea touted in an earlier post that people would be “safer picking a concentrated selection of their own stocks” and “managing their own risk” is very dangerous advice and not suitable for most people.
Baillie Gifford do have a problem in that their concentrated portfolios are stuffed full of highly rated growth stocks, and these stocks have taken the biggest losses as interest rates have risen. Long term interest rates have seemingly finally stopped falling after c40 years of decline, and although we don't know how high they are headed just the fact they have stopped falling has been enough to check a lot of "certainties" - such as growth stocks can only go up. The fear has to be that BG type stocks will struggle for some time, and they will lose more money, which, because their funds are concentrated and pretty similar in opposition, means they are selling their own stocks, which causes further underperformance. Growth stock investing isn't necessarily dead forever but could very well produce very little by way of returns for several years. the historical precedent is the Nifty Fifty phenomenon of the late 1960s and 1970s which saw some of the fashionable companies of the time go bust, but others flourished as companies but took years to regain previous levels.
PK13 – depending on your marginal tax rate AVC’s *can* be more beneficial than a SIPP (as long as your work place fee’s and investment options are satisfactory)
Ooh interesting. Thanks.
Slightly compliccating factor is that if I stick money in my work pension then my employer also chucks in their NICs, which I thought bumped it up by an additional 13%.
But then from what you said, in the highercrate tax bracket you only pay 2% NICs.
Aha Gotcha. Just realised that my first stayement Was Employer nics and the second employee.
<Edit. Looks like Emp'er nics is 15.05%, so I am indeed much better off putting it into workplace pension that Sipp>
Ta muchly
As someone who's just playing with a miniscule portfolio on trading apps, where do you get your tips?
Everything bar one is down at the moment!
No Warren Buffet, I!
The safest way of investing is to do your own research, pick your own concentrated portfolio of stocks, and manage your own risk.
Might work for you but by the sound of things you are a trader rather than an ordinary investor who on the whole want a fire and forget method.
Why on earth would letting some random fund manager do it be safer? Have your never heard of Woodford?
Valid point and I have lost money to him and may or may not get some back from HL via group litigation and that's why I always go for low cost index trackers and ETFs. But people are happy with Terry Smith at Fundsmith and BG. Kryton was probably happy with BG until recently but now he sees his Vanguard life strategy fund has been tickling along in the background and over the long run will do him fine.
How are you gonna outperform the market when the fund you have bought owns most of QQQ (and still manages to underperform it 🤣)?
Just buy an index tracker for QQQ or similar, simples.