Isa question.

[Fluffyhairteddy]

Hi everyone

I’ve very recently inherited some money and I’d like to open a stocks and shares Isa. I’m new to all this so can anyone answer me two questions:

• I know the annual allowance is 20k. Could I put say £10k with vanguard and £10k with another s and s Isa provider or does it all have to go with one provider?
• can I pick different funds within my Isa? So with vanguard there’s so much choice! Could I pick 6/7 different funds staying within the 20k limit?

Thanks so much!

You can only open one S&S isa per year. You can select different funds within that isa.

You use your contribution to the ISA to purchase funds to the value you want. For example, You will invest $20k worth, but the funds will be worth more (hopefully!) or less (not good) at the next valuation. A lot of platforms/providers value daily.

You can use different funds in varying proportions depending on your investment aims. Eg. 50% in one fund, 25% in two others to total 100%. Might be worth having a small cash pool in the portfolio to pay for charges?
Apologies can't see a pound sign on my tablet keyboard 😁

Thanks so much.
So by one Isa a year you mean one provider? So if I go for a vanguard s and s Isa and choose loads of dif funds to the value of no more than 20k but it has to be via the vanguard platform am I right?

@Fluffyhairteddy

Yes, that is right - one provider, but select different funds.

We also drip feed ours in monthly, which smooths out the peaks and troughs in stock market throughout the year.

However, I read the other day that paying it in a lump sum can sometimes be better. The downside of that, though, is if you pay in a lump sum just as your chosen fund(s) peak, then the market crashes, it could take a while to recover your money back to investment cost.

This happened to me in the early stages of investing, when I did one lump sum a year. The funds eventually recovered, but it has taken a long time.

Whereas the later funds that I drip-fed money into, have made huge gains over time.

Ah yes - I see. But I wonder if transaction fees might cancel out any gains by drip feeding. So much to think about. I’m planning on leaving the money in there for 10-15 years so hopefully see some upside!

You do have to watch for fees - fund fees and platform costs do detract from the overall value. However you would hope your chosen funds would do better than the fees 😁. Check the costs of the fund and check what the past performance has been.

Drip feeding money in also works (pound-cost averaging) as you hope to ride out the peaks and troughs if the prices.

hwww.moneyhelper.org.uk/en/savings/investing/stocks-and-shares-isas

The link might be helpful. The site used to be Money Advice Service.