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ISA help for novice, please

(6 Posts)
IfYouGoDownToTheWoodsToday Sun 02-Apr-17 11:37:16

As the title suggests I need advice but don't know where to start. I'm 55 and want to start investing in the stock market, to build up a retirement fund, but not sure whether to start- a SIPP or a Stock Isa? I have a very tiny teacher pension and that is it.

I like the idea of with the SIPPS, of the govt putting in the extra 20% now, but obv then I'll have to pay tax at the other end, but seeing as I won't have a huge pension anyway, think that wouldn't be too much tax to pay, so figure a SIPPs is a better investment than a stock ISA, as more money is going in to start with.

Is my thinking ok or am I completely on the wrong track?grin

Also if I was a SIPPs where do I start getting one?

TIA.

kath6144 Mon 03-Apr-17 20:02:51

Have a look at Hargreaves Lansdown, an online stockbroker. They offer both ISAs and SIPPs, and a wide range of funds, of all risks, which can be held in either - or both!

You are right that with a SIPP you get tax relief when money goes in, and then taxed when you take it out, but there are also benefits in terms of passing on a SIPP when you die (esp if before 75).

ISA has advantage of tax free when accessed, and can access as and when you want, but no extra money from govt.

Could you afford to save into both?

Whichever you choose, make sure you drip feed money in monthly, not as a lump sum. That way you 'smooth out' the peaks and troughs of the stock market, buying some months when its low, and other months when its high.

IfYouGoDownToTheWoodsToday Tue 04-Apr-17 14:41:25

Thank you Kath, I will have a look at HL. I can afford to put money in both a SIPPS and Stock ISa, so will look at that. And thank you about the tip of drip feeding in monthly! That makes perfect sense.

nannynick Wed 05-Apr-17 08:11:22

You also want to spread risk by investing in a variety of funds, where the fund invests in many companies.

Read, read, and read again the many documents you can get about funds and look at performance charts. Some funds have been going for 50+ years, others are very new. I would look at those with a 10 year track record or longer. Keep in mind that past performance is not an indicator of future performance - but having some history is good.

You will come across two major fund types: accumulation and income.
Accumulation funds reinvest returns.
Income funds pay a dividend.
As you get older and look to draw on the returns, you want to change from accumulation to income but those funds may not grow as much.

Do lots of research, read about fund types and classes. Learn about the risks and how to spread risk.

SvartePetter Wed 05-Apr-17 08:15:47

I would suggest that you look at the monevator website. HL is good but at the end of the day they want your money.

specialsubject Wed 12-Apr-17 09:53:58

Also there are other isa providers that charge less.

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