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Trading212 or Vanguard. Open both a Cash ISA and a Stocks and Shares ISA. Up to a maximum of £20,000 shared between them put whatever you’re happy with risking in the Stocks & Shares ISA, put the rest in the Cash ISA. When you feel happier investing then you can move more out of the cash ISA into the S&S ISA.
Let me quote you; “But I see a non-negligible number of reviews talking about hidden costs and difficulty withdrawing at need” -
That applies to ALL S&S ISA providers. If you’ve cash in your S&S ISA then that can be withdrawn straight away. But if you’ve got to sell some of your investments it typically takes 3 days minimum because whilst the sale can happen immediately and the cash “show” in your account because it takes a couple of days for a sale to fully complete and the funds from the buyer to end up in the account of the S&S ISA provider you can’t just sell and instantly withdraw the money. So yes whilst there is a delay it’s typically around 3 working days.
“I’m also inherently suspicious of anything that needs to advertise so relentlessly” -
Quite a few well established companies that do S&S ISAs are advertising following the government wanting to push personal investing and the upcoming tax changes to ISAs. A J Bell is absolutely blitzing TV and social media with adverts. They’re seen as a very safe well established pair of hands
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The key goal here should be to ensure you have sheltered all the money (emergency fund, long-term savings and any money designated for investment) tax-efficiently, i.e so that you’re not at risk of paying any tax on interest in the near future and any S&S are not at risk of capital gains tax. If you try Trading 212 or any of the other platforms and don’t like it, you can transfer your ISA to another provider. I would get the emergency cash into an easy access ISA with the best rate available. That deters you from accessing it for non-emergencies. In terms of the S&S ISA, for ‘set and forget’ stuff I’d probably go with Vanguard or maybe interactive investor. Ideally, try and get a very small direct debit going to add to the ISA monthly. Even £25-50 is worth doing if you can manage it, I accept not everybody can.
I assume you’ve considered the obvious alternative here: some or all of the ISA money could go to your retirement savings. If you’re under 40, that could be into a LISA, however the most obvious answer would be to get a SIPP started up and bung some money in there assuming you don’t have a lot in pension at present. You could also look to up regular pension contributions from salary for e.g a year or investigate putting a lump of cash into your existing workplace pension. Without wishing to tell you how to live your life: if you are unhappy or worried about where you are in terms of current income etc, it isn’t too late to address that and work towards achieving other things if you want them. Whatever has happened to you in the past, it’s not fair to your current self to allow it to derail your future.
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@Geordie_Gains Thanks for this, there’s a lot to think about here actually!
Now that I have both chunks established, my strategy is to try and live so that I leave some money left over at the end of the month and split that in half - half to the cash fund, and half to the long term investment, with maybe a few hundred left in a current account to buffer tight months. I’m reasonably confident I have the discipline to run short term one-off spends from the same pot as the emergency fund without depleting it. Does this work with a cash ISA, or is this a terrible idea altogether?
I had not considered LISA or SIPP because I’m afraid of specifying that committment for the money, in all honesty. But retirement is most likely what the money will end up being used for after all, and the description of SIPP does sound attractive. Do you know where I can go for advice on that? Or rather, which details matter and which are just niche concerns?
I appreciate your final note. I come from a line of high achievers and not having ‘made it’ myself has been a serious source of distress for a long time. I have made several attempts to pivot myself, with more or less clarity. I have also made use of the alumni service at my university (a decent one, for what it’s worth) and had many phases of more scattered applications. Nevertheless I have to admit that after the last bout (redundancy about 12 months ago) I’m deeply tired. I’m in a warehouse job now where there may not be much by way of progression but I have at least recieved meaningful and directed training, which shouldn’t feel so novel to me but it really does! I’m aware I need to cultivate the attitude of effort leading to results, but I have literally nothing in my working life to pin that expectation against, and plenty to the contrary. I can make a better case for myself through my hobbies (I’m a scuba instructor), where I actually have developed real technical skills and recieved mentoring over the long term. I will no doubt get back to the search again sooner or later though.
Why don’t you split the money across multiple stocks and shares ISAs until you know which one you prefer. Then transfer the others into the preferred service?
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Forgive me if this seems like a stupid question, I believe I’m tripping up at what ougt to be the “easy” part!
I’m 36 and currently a minimum wage earner (resisting the temptation to make this post about how I got here; bright kid with a strong start, probably neurodivergent, loss of a parent shortly before leaving school, disappointing degree result, lost decade of gradually sliding backwards).
I’m making ends meet, if a little precariously. The strong start and the early bereavement might have done a lot of damage personally and professionally, but they did mean I was able to buy my home in my mid 20s so my LTV is in a place that I now get the better rates. The mortgage has gone up like everyone else’s, but rent in my area would be double that and I have a lodger which helps a lot. My sense of meaning and accomplishment comes from a couple of hobbies indulged to a high level, which fill the space conspicuouly not occupied by career, partner and/or kids and I’m therefore reluctant to cut out.
Onto the question -
In the last year I’ve lost both of my grandmothers, who had both outlived my respective grandfathers. Inheritance combined with the couple of grand I’d managed to put aside by myself, means I now have just shy of a year’s expenses in cash. This is a first for me, and I’m keen not to blow it! It is all currently in an online savings account, which gives an okay interest rate on every month that I don’t withdraw (which I seldom do). I’m inclined to leave half there as an emergency fund.
The flowchart agrees with my own judgement on what to do with the other half - stick it in a fire and forget S&S ISA, top it up whenever I have any spare cash but otherwise leave it alone to create myself a sensible buffer for some nebulous distant future that I’m quietly pretty worried about.
But… mechanically, how do I do that?? What platform works best? I want something simple to operate, to remove any barriers from myself in terms of actually topping it up. That would lean towards T212 or a similar online platform. But I see a non-negligible number of reviews talking about hidden costs and difficulty withdrawing at need, which really make me nervous if this is going to be my long term security! I’m also inherently suspicious of anything that needs to advertise so relentlessly.
Is anyone able to help shunt me out of my decision paralysis?