Forgot to invest in ISA...

[Amaryllis]

The past year was somewhat hectic, and I completely forgot about investing my ISA allowance. Which, with the benefit of hindsight, may be a good thing.

But now, with just a few days left, I'm wondering... should I or shouldn't I, and if yes, what?

My modest wealth is currently invested in c. 50% property, 25% cash, and 25% investment and unit trusts (roughly split between UK index and Vanguard World index tracker, plus a collection of investment trusts spread across Europe, Asia, India, China, smaller companies, emerging markets, JP Morgan Mercantile).

I probably won't need to rely on any of my equity investments in the next 10-15 years.

What would you do.... Any suggestions welcome!

[Midsmartin]

I would contribute my £20000 cash to an ISA this week, and then invest at my leisure in the coming weeks and months.

[ursaminortaur]

The past year was somewhat hectic, and I completely forgot about investing my ISA allowance. Which, with the benefit of hindsight, may be a good thing.

But now, with just a few days left, I'm wondering... should I or shouldn't I, and if yes, what?

My modest wealth is currently invested in c. 50% property, 25% cash, and 25% investment and unit trusts (roughly split between UK index and Vanguard World index tracker, plus a collection of investment trusts spread across Europe, Asia, India, China, smaller companies, emerging markets, JP Morgan Mercantile).

I probably won't need to rely on any of my equity investments in the next 10-15 years.

What would you do.... Any suggestions welcome!

If you are investing for the long term then investing now rather than earlier in the year would likely be a good move as prices are so much lower and the current coronavirus epidemic will pretty likely end in a few months time if only because practically everyone will have caught it - at that point stock markets should generally recover. The government moves to support businesses and employee wages should mean that relatively few businesses should be bankrupted in the meantime and should eventually recover. I'd be surprised if the markets weren't higher by the end of the year - though some UK businesses might then be hit by the further consequences of brexit.

[kempiejon]

I agree with the plan of getting the cash inside the tax wrapper before you lose that chance in a few of days. As to what to invest in I'm sitting on my hands for a bit. I'm watching vanguard etfs particularly Asia and USA, though if you already have vanguard world index that's probably in the same ball park.

[Amaryllis]

Thanks for your comments.

Forgot to mention, I also have a fair chunk in Vanguard US funds. Not sure about Asia as I feel a bit out of my depth there.

I guess I'm debating whether UK, Europe or US, or a mix. But which fund(s)...

[AleisterCrowley]

Just get the cash in and let it sit there for a while. I doubt the current situation will resolve quickly.
This is NOT advice as I'm normally wrong..but I'm going to be investing smallish amounts every month or two in Vanguard VWRL/VUKE
The amount, frequency and mix will depend on the outlook at the time
(I know VWRL has a UK component c 4.7% so there is duplication)

[jaizan]

I'm a bit late here, but here are a few guidelines:

1 ALWAYS use the full ISA allowance, assuming you expect to have the full ISA allowance available each year for the foreseeable future.

2 With a broker account with an ISA wrapper, you have several options for how to deal with that money. For example:
(i) Leave it as cash pending investment
(ii) Buy stocks, investment trusts, stock etfs or unit trusts
(iii) Buy a Gold etf
(iv) Buy a short term US treasury etf.

So no need to worry about the state of markets.

The one case where you might not use the ISA is if the incoming money is taxed at 40% (or more). Then, you MIGHT consider a SIPP instead, as you get 40% tax relief. For me, this only makes sense if you expect to be a basic rate taxpayer when retired and you don't mind having the money tied up.

[Urbandreamer]

The one case where you might not use the ISA is if the incoming money is taxed at 40% (or more). Then, you MIGHT consider a SIPP instead, as you get 40% tax relief. For me, this only makes sense if you expect to be a basic rate taxpayer when retired and you don't mind having the money tied up.

ISA or SIPP is always a debate, especially for younger people who also have the option of the LISA.

As I'm going on 57, SIPP investments make more sense even though I'm a standard rate tax payer. I'm not allowed a LISA but could access my SIPP almost as easily as a ISA and 25% of it both benefits from a return of the tax that I paid for earning it yet wouldn't be taxed.
* I could take out a significant amount tomorrow without affecting my ability to contribute to the SIPP at about the same rate in the future.
Indeed if I stop work the rest might not be taxed. If I take less than £12K pa and have no other taxable income (ie state pension because I wouldn't be over 67) topping up my income from my ISA, then no tax would be due.

Another point, if you fear for job security, is that anything above £6k in a ISA/LISA would effect universal credit while money in a SIPP would not. I wouldn't be able to get universal credit because of ISA savings going back almost 30 years. Something to consider in the case of a LISA, which some think as a pension alternative.

It's a big subject to debate and off topic for the thread, but I don't think that there is only one argument.

* I'm not planning on doing so as I could take from my ISA. There are restrictions if you wish to avoid paying extra tax and keep contributing to the pension, but it is currently possible if you are over 55. Research the pension recycling rules if you doubt me.