Investments - Strategies, Ideas, Options & advice

[PNWokingham]

I don't think there is a thread on here so thought would start one. Main idea to discuss investment accounts, investment options and ideas, income generation for retirement etc. Any good tips on stocks, bonds, funds etc - even bitcoin junkies can join in, although i won't touch this!

I have 2 accounts - Interactive Investor and AJ Bell. I have all 3 accounts in II - ISA, SIPP and Trading and just ISA and SIPP in AJ Bell. Both are decent with charges and useabilty and cheaper than the other big competitor Hargreaves Lansdown. I may merge the accounts in the future

My strategy in the SIPPs and ISAs is generally focussed on Investment Trusts (closed-ended funds), including REITs (Real Estate Investment Trusts) and equity Income trusts - and hold no open ended funds. I have allocated across most of the high dividend REITs, infrastructure and Renewable Energy funds, as they sold off heavily in 2021 to 2023 and were trading at big discounts to NAV. I prefer the fact that you can buy a basket of shares/ bonds/ infrastructure often for a big discount to their worth (NAV - net asset value) rather than just buying at NAV in open-ended funds. Also you can deal stratight away as they are companies on the stockmarket not funds that are valued and priced once per day. The other reason is there are no platform charges (compared to the 0.3% to 0.5% area per annum of charges for holding open-ended funds). And the investment trusts are often managed by the same fund managers as open-ended funds. The negative is that there is less choice. Most of my investments have large dividends and and although i have not analysed it overall it will be well above 5% on average.

I find Citywire a great source of info on the Investment Trust arena

Citywire Investment Trust Insider | Fund Manager News, Analysis and Data

News and analysis for investment trust enthusiasts – private or professional.

citywire.com

My other strategy for the Trading account is to buy gilts - very low coupon ones - generally 2026, 2028 and 2030 atm. I also have some of the 0.5% 2061 long-end Gilt, which will do well if interest rates are cut a lot. I am now going to put all spare cash into Gilts in the coming years rather than the bank, where i am heavily taxed on the interest. The reason being is that there is no capital gains on Gilts and I only have very low coupons (the annual interest) - between 0.125% and 0.375% - and this is what is taxed in the same way as interest in banks, with the majority of the money earned on the capital gain at maturity or on the way there if you sell.

 

[Fade and Die]

I’ll be watching this thread for ideas… at the moment we have a Post office ISA, some Quilter ISAs, Premium Bonds and some crypto (about £20k which is just a gamble really.) I did have some precious metals but I’ve rotated that money into our ISAs over the years.

@PNWokingham i will look at gilts, is it a long term thing?

 

[Bunkermagnet]

I mainly just have my private pension, which is hedging into medium risk stocks etc. It returned 5.7% last year.
As regards money accounts, I'm finding ISA's dont give the return some savings accounts give.

 

[RichA]

I'm very risk averse with my life savings.
The return on Premium Bonds for last year was so poor that I ditched them and the money is now in savings accounts through the Flagstone platform.
I move it to whichever instant access accounts have the highest rates, currently just under 5%.

Am I correct in thinking that, as a PAYE employee, any taxes due on my interest will be calculated by HMRC and just applied to next year's tax code?

 

[Old Colner]

I'm finding ISA's dont give the return some savings accounts give.

It all depends whether you are a tax payer and at what rate you pay tax.

A 4% ISA does not incur tax payments whereas a 5% non ISA could be taxed at 40% which means it only pays 3%.

 

[The Fader]

Have a look at my post #527 in the retirement thread.

I describe a strategy that worked well for me.

Not for everybody but worth considering to see if fits your situation.

 

[PNWokingham]

I’ll be watching this thread for ideas… at the moment we have a Post office ISA, some Quilter ISAs, Premium Bonds and some crypto (about £20k which is just a gamble really.) I did have some precious metals but I’ve rotated that money into our ISAs over the years.

@PNWokingham i will look at gilts, is it a long term thing?

There are gilts for all time periods. Government debt issued all the time so maybe 2 or 3 at leat maturities every year. The key thing being if in sip and isa you don't care about the coupon (annual interest payment) but if not in a "tax protected" account go for the low coupon ones

 

[PNWokingham]

I mainly just have my private pension, which is hedging into medium risk stocks etc. It returned 5.7% last year.
As regards money accounts, I'm finding ISA's dont give the return some savings accounts give.

that is onl cash isas, which for many people are a waste of time as there is an annual allowance for interest which will be good for a lot of people who are not higher rate taxpayers

 

[PNWokingham]

I'm very risk averse with my life savings.
The return on Premium Bonds for last year was so poor that I ditched them and the money is now in savings accounts through the Flagstone platform.
I move it to whichever instant access accounts have the highest rates, currently just under 5%.

Am I correct in thinking that, as a PAYE employee, any taxes due on my interest will be calculated by HMRC and just applied to next year's tax code?

as far as i know any savings interset is down to you to declare - if basic rate taxpayer and within the 1k savings allowance, you are fine, but any different and you will need to reconcile through a tax return. I don't think anything is done automatically. It would be so much simpler if all tax issues were auto on your tax account - ie all banks and brokerages sent the end of year certificate and it was all amalgamated with your end of year tax return

 

[PJ87]

as far as i know any savings interset is down to you to declare - if basic rate taxpayer and within the 1k savings allowance, you are fine, but any different and you will need to reconcile through a tax return. I don't think anything is done automatically. It would be so much simpler if all tax issues were auto on your tax account - ie all banks and brokerages sent the end of year certificate and it was all amalgamated with your end of year tax return

Savings accounts report all interest now to HMRC so if you go over your savings allowance they will adjust your tax code the following year

 

[chrisd]

Will any of this be interpreted any time soon???

 

[Bunkermagnet]

It all depends whether you are a tax payer and at what rate you pay tax.

A 4% ISA does not incur tax payments whereas a 5% non ISA could be taxed at 40% which means it only pays 3%.

But I don't enter the 40% tax bracket, which is why I said what I said and is what I do

 

[PaulMdj]

as far as i know any savings interset is down to you to declare - if basic rate taxpayer and within the 1k savings allowance, you are fine, but any different and you will need to reconcile through a tax return. I don't think anything is done automatically. It would be so much simpler if all tax issues were auto on your tax account - ie all banks and brokerages sent the end of year certificate and it was all amalgamated with your end of year tax return

I recently received a tax bill from HMRC for the tax I owe on interest from last year, I didn’t inform them so can only guess the Bank did.

 

[PJ87]

I recently received a tax bill from HMRC for the tax I owe on interest from last year, I didn’t inform them so can only guess the Bank did.

What I found VERY cheeky about the personal savings allowance is it counts as income even if tax free

So Just an example if somebody was about to lose say childcare due to earning amounts and they were just below the limit and they earned £500 in interest, they wouldn't pay any tax on it but would lose their child care because of this earning

 

[hambugerpete]

I've got a sipp with salary sacrifice through work. Also a stocks and shares ISA. I've got a few individual shares but mostly I put my savings into passive ETFs like vwrp and vuag. Long term this will out perform cash. I guess a lot will depend on where you are age wise as while the stock market will offer a much better return it will have its ups and downs and being able to wait them out is key.

 

[Tashyboy]

Oddly enough been out for a swallow tonight with three pit lads. It was a very childish night talking and laughing about rammel.
However, talk got around to property/ our house and how to protect it from Mr Tax man. I think it has been signed over to the kids but there is some confusion as to whether it should have a 7 or 12 year period for it to transpire that the tax man cannot touch it.

 

[Bunkermagnet]

Oddly enough been out for a swallow tonight with three pit lads. It was a very childish night talking and laughing about rammel.
However, talk got around to property/ our house and how to protect it from Mr Tax man. I think it has been signed over to the kids but there is some confusion as to whether it should have a 7 or 12 year period for it to transpire that the tax man cannot touch it.

I think it's still 7 yrs. However,they are trying to close all the loopholes around this sort of thing, and if your children are now the owners of the house you live in I read peppercorn rents would'nt count as market value rents were what was being looked for. It also has tax implications for your kids as they have to declare it, and also explain why they may/may not be earning income from am inhabited house they done earn any income from.
My parents looked at this a few years before they went, but they decided the implications weren't worth it.
As it ended up, my mum went into a home for 3 .5 yrs before she died. We had to sell the house when she went into the home, but with everything she got (entitalled benefits etc) the hit to what we 3 boys got wasn't anywhere near what we all feared from stories being out there.

 

[RichA]

And if you and/or MrsT end up in state funded care, I believe there's no time limit on how far they can go back looking at assets you gave away.

 

[Ross61]

I'm very risk averse with my life savings.
The return on Premium Bonds for last year was so poor that I ditched them and the money is now in savings accounts through the Flagstone platform.
I move it to whichever instant access accounts have the highest rates, currently just under 5%.

Am I correct in thinking that, as a PAYE employee, any taxes due on my interest will be calculated by HMRC and just applied to next year's tax code?

I have an ISA with Coventry BS that pays just under 5% (currently) it’s restricted to 3 withdrawals per year, but I don’t need to make any withdrawals. If I suddenly need a lot of cash it’s still easy to get it out for free.

 

[Bunkermagnet]

And if you and/or MrsT end up in state funded care, I believe there's no time limit on how far they can go back looking at assets you gave away.

This may be one of the loop holes (the 7yr rule) they wanted to close.
You also have to be able to account for all monies taken out or spent.