UK Personal Finance and Investing

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Pantsmaster Bill: May 7, 2007

There may also be management fees and ground rent, depending on the property. These can be anywhere from a few pounds a month to thousands a year. For my flat in a converted house we pay �110 a month

# ¿ Aug 14, 2019 12:14

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# ¿ May 22, 2024 05:03

Pantsmaster Bill: May 7, 2007

jaete posted:

The fact that leaseholds exist is a whole big tin of , I would advise either buying a freehold house or try to get a share of freehold at least if it's an apartment or such.

There are all kinds of horror stories around about leasehold apartments, you can find more info online (I'm too lazy to dig it out right now)

Wait until you hear about rentcharges!

# ¿ Aug 15, 2019 11:59

Pantsmaster Bill: May 7, 2007

dwayne_dibbley posted:

What investment platforms are recommended?

I'm thinking of 1 or 2 low cost index funds for 10-15 years. Vanguard has an annual platform fee of up to �375 while Halifax has no annual fee. So buying Vanguard index funds from Halifax instead of Vanguard seems to save me �375 a year? Am I missing something obvious?

Thanks

I use Charles Stanley direct for my ISA, I think it�s something like 0.35% on funds held

# ¿ Jan 8, 2020 21:07

Pantsmaster Bill: May 7, 2007

My gf is looking to invest some money in a S&S ISA rather than keep it in a savings account. I use Charles Stanley Direct for my investments, but I think the charges have gone up since I opened.

Is Vanguard still a good bet? I think the simplicity will probably help her, and the fees don�t seem too high. She has about �15k to invest.

# ¿ Jan 26, 2020 22:19

Pantsmaster Bill: May 7, 2007

So coming up on tax year end, check my thinking....

If my taxable pay (salary + shares bonus + overtime - pension) ends up being above �50k, would I be best placed in making a one-off contribution to my pension for the difference? My understanding is that I then can claim the extra tax relief on that amount and I'll effectively get a refund from HMRC? My usual pension contributions are salary sacrifice so I'm not quite sure how it works out if I do a one-off payment.

# ¿ Mar 20, 2020 11:47

Pantsmaster Bill: May 7, 2007

I haven�t checked recently, but HL are generally pretty expensive.

Compare here:

https://monevator.com/compare-uk-cheapest-online-brokers/

Usually % based are cheaper for a lower amount, flat rate cheaper for a higher amount.

# ¿ Jun 8, 2020 11:04

Pantsmaster Bill: May 7, 2007

Finance-related question: how long do you all keep paper records for?

Bank/credit card statements, payslips, HMRC letters, etc.

# ¿ Jun 19, 2020 14:26

Pantsmaster Bill: May 7, 2007

Worth noting you don�t even need to do self assessment if you�re in the 40% tax band. You can just write a letter to HMRC with a copy of the contribution receipt from your provider.

E: to claim the additional tax relief

# ¿ Sep 16, 2020 22:57

Pantsmaster Bill: May 7, 2007

Fwiw you can probably get the institutional fundsmith shares via a third party broker ISA. I bought the regular (non sustainable) I class equity from my iWeb ISA.

# ¿ Dec 9, 2020 23:48

Pantsmaster Bill: May 7, 2007

Theophany posted:

HSBC one is much more expensive than the Vanguard one (0.18% vs 0.07% p/a), but both are plenty cheap imo.

I'd be wary investing in a fund that is not denominated or hedged back to Sterling, personally. That Vanguard one appears to be based in USD. It's probably not that big of a deal to most people, but if you want to cash in the fund you'll be at the mercy of GBP:USD exchange rates and Sterling has looked like dogshit since 2016. You can interpret that as 'it can only go back up' or you can wonder just how bad Brexit can get when it comes to our esteemed leaders negotiating trade deals.

Hang on, does this really matter for a fund like VUSA where it�s based on US equities though? You�re exposed to the currency rate either way?

# ¿ Jan 29, 2021 10:36

Pantsmaster Bill: May 7, 2007

Aeble posted:

I figure I can pop in a quick question here: I'm moved to London 2 years ago and I've built up some savings that I want to invest. Basically, the question is through what institution. Back home, I simply invested through my bank for historical reasons, but two new institutions had popped up specifically for stock trading (Saxobank / Nordnet). Here, I'm tempted to simply do it through Barclays and keep it all in my bank as well, but I see tons of financial adverts in the tube and if someone here has an overview that one of these choices is clearly cheaper/easier, then I'd like to draw on that knowledge before I default to Barclays. (Mainly, I'm looking to buy and hold an index or some selected stocks.)

Thanks in advance, I hope this is within the scope of the thread.

There�s a few things which might affect this. Are you eligible to invest within an ISA, or is this just a standard investment account you�re looking for?

Your cheapest platform for fees will depend on how much you�re looking to invest. monevator has a good list of brokers with their fees, generally with smaller amounts you�re best off with % based brokers and with larger amounts go with flat rate. Barclays are on that list so you can compare for your purposes.

Fwiw I use iWeb, but they have just put their account opening fee up, so it might be less competitive now.

# ¿ Jan 29, 2021 10:45

Pantsmaster Bill: May 7, 2007

Your pension provider will often top up the 20% by default when you make a lump sum contribution. If you�re in the higher tax band, you will have to claim the additional relief by writing to HMRC.

# ¿ Feb 4, 2021 21:48

Pantsmaster Bill: May 7, 2007

Hammerite posted:

I need to figure out what to do with money that I've been gifted by relatives.

I have been gifted money by my parents. I won't give details but it's high 5 figures. I have a mortgage, but it's all but paid off; the amount remaining is trivial and I just need to get around to speaking to my bank, because I'm not sure whether closing it out needs to be done by arrangement or not. Since I bought my house a few years ago, I've generally made the maximum overpayments my mortgage arrangement allowed, because (1) it's easy to understand and (2) as a general principle I would prefer not to have debts of any kind. That meant that I didn't really have to think too hard about what to do with my money. Now that the mortgage is nearly gone and I have no immediate plans to move, and I have this money, I need to figure out what to do with it and I don't have a plan at all.

I'm lazy and risk-averse, and therefore I am wary of doing anything that requires me to actively monitor what my money is doing from week to week, or that puts it at risk of potentially being lost. But I am aware that for someone my age (thirties), the typical advice is to prefer things that offer higher returns over time like stock market-based investments. I also find that trying to figure out anything to do with this sort of topic tends to make me anxious, so I tend to shy away from making decisions about it. But I can't really justify continuing to do that at this point.

I have a workplace pension which implements salary sacrifice, and I am planning to instruct my work to put more of my pay into that. I live fairly inexpensively, and in a part of the country where cost of living is cheap.

I was considering starting by taking out a Lifetime ISA. It would be as a saving-for-later-life kind of deal, since I already own a house. I understand there's an argument for not doing that but instead just paying even more money into my pension, since salary sacrifice makes that advantageous. My thinking is that I would be able to take the money out of the Lifetime ISA at age 60 as a lump sum, as opposed to later than that and with more restrictions; and besides it would be a bit more diversified to have the pension and the ISA as opposed to just the pension. Regardless of whether I get a Lifetime ISA or not, I guess I need to start thinking about things like using my ISA allowance every year.

Have you seen the UK Personal Finance flowchart?
https://flowchart.ukpersonal.finance/

In your situation a LISA probably isn�t the best choice, you might be best off opening a SIPP to get the tax relief (or adding lump sum payments to your existing workplace pension if it isn�t too bad cost-wise). As you noted, this does lock it away for a while, so you may wish to combine this with a S&S ISA which you could get money out earlier, if you think you might want some flexibility. You likely won�t be able to contribute your total amount in a single tax year, but you could likely do it in two if you max out contributions.

Vanguard is a decent option for both SIPP and ISA as their fees aren�t too high and the limited number of investment options simplifies things somewhat. For example, you could pick a target retirement fund, and Vanguard will automatically �rebalance� into safer investments as you near that date. Or their life strategy funds allow an easy diversification (LS80 is 80% stocks, 20% bonds, etc).

If you literally don�t need the money, I echo the other poster and say consider helping out a cause you care about, if you feel you can afford it.

# ¿ May 15, 2021 16:27

Pantsmaster Bill: May 7, 2007

Terry Smith has a good track record, but there are plenty of other fund managers who have had a good run before things going wrong - and I say this as someone with a chunk invested in the equity fund.

Vanguard Lifestrategy is alright but it has a heavy UK focus. That may or may not be what you want - it�s not for me as the growth in the UK market has been terrible recently and it seems odd to me to overweight your home market (maybe it�s a mental thing for some people?). If you want a �set and forget� 100% equity fund you�d probably do just as well with an all-world index tracker - I think Vanguard do one. Or if you want set and forget until retirement, the target retirement funds are good.

# ¿ Nov 8, 2021 21:39

Pantsmaster Bill: May 7, 2007

You still get the tax gains from pension contributions, so the decision is down to whether you want to retire sooner or not (or just access some of the funds). Of course you need to take into account the potential for the retirement age being shifted out by the government!

Whether you contribute more to your company pension, or have a SIPP, probably depends on the fees you would pay for either (and fund options).

# ¿ Nov 9, 2021 17:49

Pantsmaster Bill: May 7, 2007

https://www.gov.uk/individual-savings-accounts/if-you-move-abroad

This implies that you cannot open/contribute to an ISA while you are living abroad.

Are you a UK taxpayer or are you paying tax wherever you are now? You may be able to open something similar in the country you are in?

Or depending on the quantities you could just open a general investment account and invest in index funds. You wouldn�t get the ISA tax benefits but it may not be an issue for you if you�re under the relevant capital gains limits.

# ¿ Nov 12, 2021 15:40

Pantsmaster Bill: May 7, 2007

Depending on where you are you could try premium bonds? The equivalent rates aren�t terrible and it looks like you can still use them as long as you have a UK bank account and wherever you are doesn�t have a local law restricting you.

# ¿ Jun 19, 2023 10:10

Pantsmaster Bill: May 7, 2007

A few thoughts:
-Why the Nutmeg ISA? The fees are pretty high. I would consider ditching that and moving into the Vanguard which will almost certainly have lower fees (note that I haven�t checked recently but last time I did this was true). You could also pick another platform. once you get above a certain balance, percentage-fee based platforms start to get expensive. I use iweb. There is a comparison list on monevator. Note that you can still invest in the same vanguard fund on another platform.

-Rather than overpaying your mortgage (which is �gaining you� 2%, take that money and put it into something safe until you remortgage. A Chip savings account is ~4.8% right now, or you could use your existing premium bonds account. At remortgage time, take the stuff you saved and put it towards the mortgage then. In the meantime you�ve been earning 4+% rather than 2.

-It�s not clear what your income situation is but based on the amount you�re able to save, you may be on higher-rate tax? If so you may want to consider increasing pension contributions, because they are pre-tax and hence are �worth more� if you�re paying a higher tax percentage.

# ¿ Oct 15, 2023 10:19

Pantsmaster Bill: May 7, 2007

MeinPanzer posted:

Thanks! That's really helpful.

With rates bound to go down this year or next, is a 5 year fixed better than a shorter term? I was thinking of opting for something around 3 years instead.

You�ll probably find that 5 year fixes are cheaper than 2 year fixes, as the rates bake in a forecast of where the banks think the rates will go. There is a chance that you could get a 2 year fix, and in 2 years time the new rate will be lower than what you would average vs getting a 5 year fix now. But, that might not happen. If you can afford the rate now, there is some comfort in knowing you don�t have to think about it for longer, and avoiding the risk that rates may even rise in that timeframe.

# ¿ Feb 5, 2024 10:43

Pantsmaster Bill: May 7, 2007

I have no idea of your circumstances but I will tell you a story.

My gran left me and my sister some money when she died, but it wasn�t formally captured in a will or anything (just an understanding between her/mum/me). When she died, my parents used the money to fund a short term need, with the promise that they would give me the money when I needed it (house deposit or something like that).

It never happened because for various reasons they were unable to pay me back. It has caused a significant amount of friction in our family.

So�be very very careful

# ¿ Feb 26, 2024 14:18

Pantsmaster Bill: May 7, 2007

Destroyenator posted:

Hi, not quite UK specific but Europe so I'm hoping this makes more sense than in a US based thread.

My partner and I own our home, don't have any crazy fixed expenses, and don't have any kids at this stage. We're fairly responsible on spending and I'm now at the point I have excess money at the end of the month, and I would like to put it somewhere useful.

I have a few long term stocks I've managed not to touch for ~10 years, but nothing life changing. If I disregard those, most of my saving went into purchasing the house and I'm essentially starting from scratch.

I'm currently on a weird tax regime as an expat in an EU country, which is overall beneficial but also means most of the tax-advantaged retirement things don't really apply to me.

I've been working through the "If you can" book linked in the OP, and I'm thinking of setting up something simple like that recommends.

My questions are:
The book recommends a mix of 1/3 US stocks, 1/3 US bonds, 1/3 international stocks. As someone not in the US, is there a good way to adapt that? 1/3 US stocks, 1/3 EU stocks and 1/3 EU bonds?
I don't know much about the difference between EU/US/UK bond markets and whether I should read them as equivalent. (Also taking US as "international" mean cutting out Asia and I guess the UK, is that something to think about?)

My bank doesn't offer Vanguard mutual funds, I can buy into their ETFs though. Vanguard have their own comparison, and as I understand it the thing most likely to be annoying is that it's difficult to set up automatic transactions.
Are there other things I should be aware of there? Is it likely I'd be able to find Vanguard as a mutual fund option if I look at other local European banks, or am I misunderstanding how that works?

here is a good article about asset allocation.

For equities I wouldn�t bother thinking about US vs elsewhere. You can buy Vanguards VWRP ETF which tries to allocate based off global stock market values. That�s inherently skewed towards the US but you get other markets too.

For bonds you could pick an EU bond ETF. Looks like Vanguard might have one.

# ¿ Mar 9, 2024 13:44

Pantsmaster Bill: May 7, 2007

I�ve always felt like the lifestrategy funds are in a bit of a weird place. If you want hands off why not just go with the target retirement funds which are literally just set and forget?

# ¿ Mar 10, 2024 11:56

Pantsmaster Bill: May 7, 2007

While I�m here, looking to open a SIPP and potentially a LISA before the end of the tax year. Do Vanguard or HL ever do introductory offers?

# ¿ Mar 10, 2024 12:03

Pantsmaster Bill: May 7, 2007

El Grillo posted:

Is it just a feature of index funds that brokers take a long time to deal in their shares? Or is this just a feature of my crappy broker (iWeb)? Seems strange that I ordered a sale of some shares early yesterday morning and nothing seems to have happened about it.

It it�s a fund, they usually trade once a day at a certain time which is when the fund is valued.

If it�s an ETF it should be near instant

# ¿ Mar 21, 2024 20:58

Pantsmaster Bill: May 7, 2007

El Grillo posted:

Ah ok thanks.

Still seems strange that the deal order is taking three+ days to actually be actioned, I guess this is just a side effect of using a broker that has no fee except a flat �5 transaction fee lol.

edit: actually I forgot the request I made was for sale of some vanguard Lifestrategy shares, not the L&G - so definitely was for an index fund sell

So you�re mixing up some concepts here.

An index fund is an investment fund which tracks a certain index (you may have heard of active vs passive funds). Lifestrategy funds are technically actively managed non-index funds because they do not track an index directly, although the underlying funds within do. If you look in the portfolio data for the LS funds you�ll see it invests in, for example, the Vanguard US equity index fund. That fund is a passive index fund that aims to track the S&P index.

Index funds can be implemented in different ways, the two common ways are OEIC and ETFs. OEICs are priced and traded once per day, ETFs work more like shares in that they�re traded on an exchange and can be bought/sold effectively instantly.

Your Vanguard fund is an OEIC which means it�ll only trade once per day. I suspect that you�re also running into �settlement time� which is the time between your sale being recorded and the funds being transferred to the broker and on into your account.

See the iweb page where it says this is usually two days:

https://www.iweb-sharedealing.co.uk/help-and-guidance/existing-customer/trading-support.html

Some brokers allow you to withdraw instantly but that is basically them making a loan to you assuming the trade will settle fine. Iweb don�t do that

# ¿ Mar 22, 2024 13:51

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# ¿ May 22, 2024 05:03

Pantsmaster Bill: May 7, 2007

Josef and Discowitch: it sounds like you have your poo poo together and are on track. However in your situation I would add some extra into your emergency fund, if and when you can. I say this because it appears from the description that you�re both working for the same company and so you�re running more of a risk that a redundancy could affect both of you at the same time.

Other than that good luck with the house purchase!

# ¿ Mar 22, 2024 13:54

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