Where should I have my ISA? Help!

[Nofilter]

Hello,

My ISA is currently with HSBC on a crap rate below inflation!!

I'm new to investing but need to know where to put it.

Anybody had experience with London Capital Finance ISA fixed 5Yr paying 8.95%?

Thanks!!

Anyone?

What kind of ISA do you have with HSBC? If it's a cash ISA then you're comparing apples with pears.
In a cash ISA your initial investment is safe - you can't lose your money, but the bond you mention is a risky investment ISA where you could lose all your money if the underlying investments do badly. The high rate they quote is nothing more than a target and in the small print somewhere it will probably say it's not guaranteed.
If you're new to investment you need to educate yourself a bit more first. Money saving expert and Motley Fool are good sites.

Thanks wonderwine you are quite right. Is it worth an FA fees though for £30k plus contributions?

I'm thinking I need:

300PCM in ISA for my retirement 25Yrs
£250 PCM in Junior ISA to use for DD university fund 16 Yrs.

They would end up to be big amounts but no idea what FAs charge?

Are Hargreaves Landsdown a more mainstream safer option? Great Feefo and seem to pop up a lot on editorial sites...

Lot to organise eek!

You may not need to pay out for independent financial advice. There are some basic steps you can take first before eroding your return on capital by paying fees to a third party.

I would personally recommend opening a new ISA every tax year (if this is with your current bank, should be very straightforward) as many products have a rate which expires after 12 months and then revert to a very poor one.

What rate is your current cash ISA paying now? Looking at the HSBC website, there is a loyalty ISA which pays 0.65% to 0.85% depending on your current account type, so long as you pay in regularly.

It generally makes financial sense to max out your ISA allowance (across both cash and stocks/shares ISA) before looking at other investment types e.g bonds, for tax efficiency. The stocks/shares ISAs are not without risk but you can elect to invest in a variety of funds, some of which are low risk.

Let me know if you need any further help.

Look up London Capital on the money saving expert forums. There seem to be a lot of new investors asking about it and a lot of others saying don’t go near. Take that for what you will.

Why are you not putting the retirement bit in a pension, for the added contributions? A basic one like aviva ?
Junior ISAs are quite good rates though, have a look on the comparison sites

On Hargreaves landsdown - they are not the cheapest platform but I like it and use it for my ISA while I’m building it up. When it gets to a higher value I’ll consider the pros/cons of swapping to another platform.

You need to understand the difference between platforms and funds. Hargreaves landsdown for examples is a very established platform (and you can also buy some of their own funds) but you could have a very risky portfolio within it. An isa with them won’t be ‘safe’ because your performance will depend on the performance of the fund or stock/shares that you’ve picked. Lots of beginners start out with trackers as it removes some of the desire to fiddle and trade. I’ve learnt a huge amount and have only really been investing for a year. Starting with small regular amounts means you can learn and make mistakes. If I had a massive lump sum to invest I would take advice because it is psychologically very different coming up with a strategy for wealth preservation v creation.

Also have a think whether you would want a child to have access to £50k plus at 18. If you are unlikely to use your own ISA/pension allowances I’d think carefully about whether you would want to have more flexibility with savings. You might want that money to be for university but you have no idea what your child will be like in 16 years time. I’ve taken a decision to only put £50 a month + gifts in my child’s isa. I’m quite happy with her having £10-15k to help at that age but wouldn’t feel comfortable with much more. I’d like it to go on something useful but ultimately it will be her money and if she wants to she can spend it all on handbags.

Why are you saving for retirement in an ISA? You are missing out on the government top up (tax relief starting at 20%). Even if you are self employed that’s more a tax efficient way of saving. If you are employed and paying into a workplace pension you could put that £300 in to it via sal sac and save on tax and NI too.

Hello,

Thanks for the info.

Up until this point I haven't made any additional plans for a pension other than a SASS that owns an office worth £120k and received £7500 per annum rent from the office.

I've been basing future pension on building up a buy to let property portfolio which I hope to finish purchasing by 2020.

BUT I've recently read a Dave Ramsey book and can see I'm totally missing out if I don't do something to take advantage of compound interest between now (I'm 36) and when I'm 70!!

Ok so what would you do if you were me?

Have £31k in an isa - change that to a pension? I'm self employed.

DD has £6k in an ISA.

Potential to save c£6-700pcm in various funds for uni and retirement.

Was thinking of moving the £31k - Top it up to £40 and put it across 4 types of funds 25/25/25/25 as advised by Dave Ramsey.

Maybe I do need to speak to someone ahhh??

Been quoted £9k though to manage it all? That was 2 years ago though when I had more liquid cash maybe I could ask for a new quote?

Thanks

Don't pay a FA - you have started the learning process now so keep going. No one is is more 'invested' in your future as you. Start with sites like Monevator and read read read all the links. There you will find out about low cost tracker funds. Go for a low cost stocks and shares tracker fund through Vanguard. My allocation is
25% Target Retirement 2040
30% VWRL (All World)
5% VFEM (Emerging Markets)
30% VVAL (Global Value)

10% cash
It's a risky-ish portfolio but I have invested more conservatively for my husband, who is 8 years older than me. The LifeStrategy 80 fund is often touted as a safe (as safe as S&S can get) fund for new investors.

Just remember stocks and shares can go down as well as up, but that's fine if you are in it for the long term - a great chance to buy more for less when the markets are down!

I put a few hundred into my pension as well each month to get the tax benefit and the matched contributions, but remember you will pay interest on withdrawal on your pension after the 25% tax free sum. ISAs are tax free and are the backbone of our retirement stash, as well as property too the same as you.

You're doing really well, educate yourself and take control of your own money.

Hope this helps!

Thanks Panda I'll check that out...

Any good books you could recommend or is it all online?

:-)