Investment advice for a newbie

[Moochuck]

Hi all,

I wanted to get some advice on making my money work harder. Im very financially unsavvy but I have always been very risk averse, saved lots pre kids. Im saving really to help my children one day.

Single parent, 50, no mortgage
150K in cash isas
30k in shares
30k instant access savings
20k stocks and shares isa opened this year

I dont have any surplus each month to save now due to school fees, maybe £100.

I tried out a stocks and shares isa this year and made 1k, so a better return v cash. Im debating either selling my shares and putting the money here, or just transferring an existing isa to a stocks and shares one.

Any ideas what youd do in my position?

I’d gradually put more money into a stocks and shares ISA. Make sure it is a low cost tracker like nutmeg or hargreaves landsdown.

@parietal would you transfer everything, ie close one isa (75k) and move?

Nobody needs 180K in cash. You need to start moving it into stocks and shares. Make sure you do so by transferring it correctly. Don't just transfer it yourself of you will lose the tax wrapper. You can transfer the lot and hold it in a money market fund within the stocks and shares Isa and then feed it in gradually rather than dumping the whole lot in one go. That will mean you are buying a different prices so it so help to even out any bumps.

@rainbowunicorn do you mind explaining the tax issue with transferring lots in one go, is this isa related

The tax wrapper that an isa gives you would be lost if you just transferred the money in the way you would for a normal account. You must follow the transfer rules for ISAs to transfer it from one ISA to another. Also beed to check that the ISA uou are wantingvto move to accepts transfers in. If you dont do it this way then any interest earned would be subject to tax. This applies to any amount in an ISA.

When you transfer a large amount from a cash ISA to stocks and shares it is generally recommended that you hold it in a money market fund within the S&S ISA and gradually invest it into stocks and shares. If you buy say £50,000 all at once when transferring to the S&S isa then you are buying the whole lot at one price. Great if you buy when the market is low but not so much if it is high that day. When you use the money market fund to gradually drip it in over a period of time you will buy across various price fluctuations therefore evening out the average price you've paid for your portfolio.

Don't close one ISA and open another. You must transfer. Otherwise you'll lose the tax free protection x

@rainbowunicorn Im pretty hands off though, if I used a money market fund, wouldn't I need to be keeping a very close eye on investments?

Also, is there a 75k limit on any isa?

There is a limit as to how much you can pay into ISAs each tax year. Currently it is £20,000a year in new payments. There is no limit as to how much you can hold in an ISA though. If its a cash ISA it is best to keep it under £85,000 to give protection if the bank goes under.
Note as well you can transfer as much as you want from one ISA to another mo ey already in the ISA tax wrapper dosent count towards your yearly limit.

Trading 212 is good for beginners. They pay a decent rate on money that is not yet invested so is sitting as cash in your account. You can set it up to auto invest at any frequency you want from every day to every year. You can either fund this by putting a lump into your account as cash within the stocks and shares ISA or you can set up a direct debit or repeating payment from a debit card from another account.
I would recommend having a look on Trading 212 there's loads of info in the community section and the help sections.

A money market fund doesn't need any more keeping an eye on than a bank account. It doesnt involve you 'playing the market'.

I'd start with your shares. Are they individual stocks (risky) or funds (generally safer)? Are they in any sort of tax wrapper (good) or just a GIA (not good)?

You don't mention a pension. Do you have one?

What are your short and long term financial plans? Money you're likely to need in the next 5 years should be in cash. Any you don't expect to touch for 10 years should almost certainly be invested. In between 5 and 10 years it's a judgement call but probably mostly invested.

I meant to start a new thread!

Firstly choose and use a platform eg AJ Bell. They do a standard platform and a cheaper app called Dodl. Vanguard, mentioned above, can purchase through most platforms but Vanguardplatform only trade their own funds. You need to look at platform cost.

i would have some in a savings account for easy access. Normally you’ll then have a General Trading GA account (no tax wrapper), ISA and possibly pension (both tax wrappers).

Put 20k per year into a sticks and shares ISA, you transfer this each year from your GA account. If you have existing ISAs always transfer DO NOT cash in and reinvest or you’ll loose your tax free.

If you are saving into a pension you’ll also get the tax top up.

As regards funds, you just need to choose - most platforms have recommendations that you just invest in, might be easier than choosing. The Vanguard Lifestyle funds normally seem pretty steady.

Thanks for your reply. I’ll start a new thread I think as that might be best, I appreciate you answering though and will have a look at your suggestions.