Should I switch cash LISA to stocks and shares LISA

[DinoGherkin]

No clue about stocks and shares or money in general tbh! But I have a cash LISA as an addition to pension. Opened at age 40. I’ve got 4 more years until 50 and can put in £4000 a year for these 4 years. I feel like as I’m leaving this til I am 60 I would be better converting to stocks and shares LISA rather than the cash LISA - but I’m really scared I’ll end up with nothing! What shall I do wise mumsnetters??? I have decent workplace pension too jic that matters.

Shares. The UK public is bizarrely angsty about shares.

Asked an LLM to compare the past ten years of data, one cash LISA, versus one stocks 50/50 US / UK tracker funds.

The annualised interest for a cash LISA? 1.8%
And the shares? 8.8%

You’d have turned 50k into 72k with a cash LISA, and into 145k if you’d picked shares.

The usual caveats, investments can go down, which can matter a lot in the last few years to retirement, I’m not an IFA, the LLM might be wrong.

If you really want to understand it google donegals rebel finance school

katie and Alan Donegal retired in their 30s after investing in stocks and shares they now travel lots and spend the spare time doing youtube videos to help other people understand pensions and stocks and shares

no scam, they’re not selling anything and are not financial advisors - they were just bored and wanted to do something meaningful for others that they themselves enjoy.

have a look

Shares. Low cost global equity tracker fund with dividends re-invested (aka an “accumulating” shareclass.) Vanguard, iShares are good trustworthy providers. Don’t be tempted to check the value every week - once every three years or so will do. Set up automated investment for your monthly contributions. Don’t be tempted to try and time the market.

This is pretty much all you need to know.

Yes I would change to S&S with a global fund, as you have 16+ years before you will take money out.

There are not many providers who will do that change given your age, AJ Bell maybe the only one.

There are various books, podcasts, YouTube channels which can be of help for giving you confidence in investing using a simple global index fund.

Meaningful Money
Rebel Finance School / TheDonegans
Money To The Masses
Making Money / Damien Talks Money
Pensioncraft

Free online course from Financial Interest/Damien Talks Money: https://financialinterest.com/index-funds-for-beginners/

Following

Yes to stocks and shares.

Short answer is just put it into a low fee global index tracker and forget about it.

Global All Cap, or FTSE Dev World Ex UK are a couple. They have both had historical returns of around 10-11%, so taking into account inflation and fees you could use 6.8% to work out how much it would be worth in future.

5 years before you need it you could change it so its not 100% equities.

Make sure you look at platform fees, fund fees, and dealing (buying the shares) fees. AJ Bell has a £1.50 dealing charge for example, so you might want to put in a lump sum at a time.

Vanguard - you need over 32k now for no platform fees I think.

Thank you all - sounds like I should transfer it! Moneybox who I’m with will let me switch it over really easily I think. Thanks!

please do spend a couple of hours consuming the fantastic resources that others have shared above before you do anything. You should have at least a basic understanding of what you are investing in and the potential risks.

It's terrifying sometimes on here people ask for financial advice on what to do with their money, one person says buy gold bullion or crypto and the poster just says yeah I'll do that. Remember we are all just people on the internet.

For what it's worth, on this occasion I think your proposed shift from cash LISA to S&S LISA makes sense though given the time horizon. The important part is what you invest in.