You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
Thpughts
As surfer says,just get it done.
It heads you win, tails you don't lose.
It's yet another example of how the UK operates a policy of to those who have shall be given more
I canceled the last to I dud at current employer as the share price tanked, and just got the 3 grand returned to me each time.
This last batch is currently 125% up so I'm hoping to get a stack from it.
Singletrackmind - it’s worth factoring the compounding effect and risk of buying shares in your own employer.
On the risk front - your income, pension and investments are all in the same basket - if Kingfisher has a bad run you could land up having your investments tied up for 3-5 years and come out no better off or at worst lose the lot.
On the compounding effect - there are plenty of relatively low risk actively managed funds that spread the risk around different companies in multiple sectors and still return 10-15% (or more) a year.
Obviously that’s not a guarantee of future performance but compounded over 3 or 5 years the £250 turns into £380 / £502.
I’d personally put the £250 a month into an actively managed scheme in an ISA - so any gain can be withdrawn from a tax free wrapper.
The employee share scheme is typically subject to tax on any gain and if the shares are underwater at the end of the term you may well get your initial investment back but compound inflation will mean it’s worth less in real terms.
The employee share scheme is typically subject to tax on any gain
Not true. If you keep them for 5 years you usually don't pay tax plus you are buying them out of your gross income which could save you paying 40% tax on that money plus the 20% discount. If it was me and I was working for the company for the long haul I would invest for 5 years then in year 6 crystalise the investment from year 1 into an ISA to spread your risk and repeat every year.
On the risk front – your income, pension and investments are all in the same basket – if Kingfisher has a bad run you could land up having your investments tied up for 3-5 years and come out no better off or at worst lose the lot.
Try reading my post again , but slower this time.
I have 5 x PPP , my risk is hugely diversified within each PPP I self select across funds, which have hundreds of constituent parts.
If the shares tank I can simply cash out and ask for all my money back , in full , at any time , not in 5 years. The risk is zero capital gain over term, much like NSI. so capital errosion due to inflation and fiscal drfit
Company share schemes are a gift. I was lucky to share a train commute in my first week of a new job ages ago, with the company secretary. He explained how it works and being an option, you cannot lose. So here I am 30 years later with the same shares I bought then, just reinvest the divi. Compound interest is your friend.
The above post 're risk avoidance is spot on, the company shares are blocked for x years, so sell free of tax and recycle the money back into the scheme, or buy something else and put new money into the scheme.
For me even when I was really skint I kept investing, I think the deal was for every 1 GBP I put in, they put in 3, so tax and employee benefit. Some employees with long service were sitting on company shares of 100s k.
OP. Be cautious about some of the responses being given. People are clearly mixing up different schemes.
Does your scheme buy the shares pre or post tax?
Shinton said
plus you are buying them out of your gross income which could save you paying 40% tax on that money plus the 20% discount. If it was me and I was working for the company for the long haul I would invest for 5 years then in year 6 crystalise the investment from year 1 into an ISA to spread your risk and repeat every year.
I think he is mixing this up with the other type of employee share scheme
I'd be amazed if this scheme was gross income.
Also you can't crystalise the 1st year only in year 6 shinton. You "crystalise" the whole lot ( or none of it) at exactly the same time.
Again you're mixing it up with the 9thrr type.
All IMHO of course.
This is on top the Kingfishre Penson scheme
I pay 8% of my gross salary , which the company add 14% to.
This is the maximum the company will add , which is great. The drawback is its based on your contracted hours (20 ) at sub £10 p/hr wages so roughly £65 from me and £110 from Kingfisher.
If i do more hrs my pension conts stay the same
Yes, I dont earn very much .
NO , hardly anyone overpays into the excellant pension scheme
Afaik no-one is in the existing share save scheme
They simply cannot afford to do it as rent and bills use up 100% of their income each month.
Been a while but share save where I worked was pre tax (with 100% extra matching shares, whoop!)
Have to hold for 5 years to avoid being taxed as an earning when selling.
Could be sold from the scheme free of CGT but lost that if transferred out of the scheme into own name then sold but...
...you can transfer shares from a scheme into an ISA but only up to the annual sub limit. TBH Doing this annually would be a ballache unless you're maxing out the ISA.
https://www.gov.uk/tax-employee-share-schemes/transferring-your-shares-to-an-isa
If you're still not sure then check with your payroll or HR department. Your broker should be able to advise on company scheme to ISA transfer process.
The NS&I Green Bonds are now available
0.65% fixed for 3 years
Pretty crap really, so crap they quietly released them yesterday
https://www.nsandi.com/interest-rates
Yeah sod that. Better than a cash isa but we'll below inflation. I'd rather have premium bonds.
so crap they quietly released them yesterday
I suspect they'll sell millions worth of them. Standard NS&I bonds are poor value but still sell like hot cakes.
Not only a poor return but the investment objective is to fund the government's green programme which isn't exactly world beating. There must be better ways of investing in worthwhile green schemes AND getting a competitive return.
A lot of people put money in the Income Bonds when the rate was 1% and better than most other regular savings products out there. A couple of months later they dropped the rate to 0.01%
🤦♂️
Not only a poor return but the investment objective is to fund the government’s green programme which isn’t exactly world beating.
If it's anything like their Covid testing / PPE contracts it will just involve giving contracts to their mates who then piss it up the wall....
I wouldn't be in a hurry to lend anything to this lot to invest.
The NS&I Green Bonds are now available. 0.65% fixed for 3 years
Wow, that is poor. The instant access Marcus account will be above that soon I suspect. Thanks Boris, but you can keep that.
There must be better ways of investing in worthwhile green schemes AND getting a competitive return.
Many.
Edit: Nationwide currently offer in-credit interest of 2% on first £1500. You can have 5 current amounts with them. They're pretty good ethically.
Below are ones we've used. The ones we have currently (S&S ISA's) are all doing well.
I've an ethical pension, it's averaged around 14% annually or the last 10 years, about 8% annually for the 5 years before that. This year currently (despite dip this month) its up at 18%+ and still got two months of the year left.
And
https://www.triodos.co.uk/ethical-isas
And
https://www.wealthify.com/ethical-investing
And
I’ve an ethical pension, it’s averaged around 14% annually or the last 10 years, about 8% annually for the 5 years before that. This year currently (despite dip this month) its up at 18%+ and still got two months of the year left.
That is extremely good!
Any ideas what to increase in right now? I cashed out some shares just before things tanked in a big way. Figure just topping up existing sustainable equity funds is probably a safe bet, unless there's any tips.
Any ideas what to increase in right now?
If this isn't a big wake up call to Europe to go much bigger into energy efficiency and renewables, then I don't know if there is any hope.
Yeah I'm into that already things aren't pretty just now. Probably a time to top up right enough.
Beware a potentially very stupid question, but:
I currently sacrifice 5% to a work pension, and my company adds 3%. On top I pay £200 into a private S&S Vanguard pension.
I can choose to increase to sacrifice 7%, and the company will go up to 5%. Even if I had to lower my private pension contributions, that’s more tax free and more free money… right?
Just checking I’m not going mad and this is a better thing to do.
Yes it should be win win, extra employer contribution which is free money and you should save the NI contribution on you contributions through sacrifice rather than paying employee contributions. Income tax saving should be equal - private pensions add basic rate to whatever you pay in, if you're a higher rate tax payer you'd have to claim the difference through tax code or tax return
I can choose to increase to sacrifice 7%, and the company will go up to 5%. Even if I had to lower my private pension contributions, that’s more tax free and more free money… right?
Yes you get the extra 2% from your employer which is free money.
Cheers, I thought as much but was tying myself in knots with well, idiocy quite frankly.
Yes
Everyone loves free money
Standard rule - max your employee pension contributions to get the max out your company!
Do it!
you get the extra 2% from your employer which is free money
I agree, but you may also want to consider whether your private pension or your employer pension will grow faster. If you can choose what to invest your private pension in, you may well get better growth, as the trustees of the employee pension will be risk averse. Also, what will happen if you change employer (I know things are a lot better there than they used to be).
Also, don't forget that your company might subsidise your pension admin fees (mine does), so that's another aspect/cost to factor in. It may be that your private pension fees are quite a bit higher than the company scheme
I agree, but you may also want to consider whether your private pension or your employer pension will grow faster.
Given you get a 100% uplink on your extra 2% contribution, it would have to be truly terrible to not grow enough to still be quids in. As for which scheme does best, that's pretty much pot luck. A company scheme will probably be a bland mix of trackers and bonds - which is as good as any selection long term.
Also, what will happen if you change employer (I know things are a lot better there than they used to be).
Less than £18k you can take the lot as cash (IIRC), more than that you can transfer it very easily into a SIPP etc.
So.... markets continue to fall in the main, and as of today I've lost about 25% of my pension fund since January as it currently stands.
Are we trusting that over the next 10 years it'll grow again? I'm sitting here with £400 to put somewhere and am not sure if it should go in my Vanguard ISA or NS&I green bonds. Without tax being charged, it feels a close call except with the former I could stand to lose. Yet I could also gain more than 1.3%aer of the former...
Are we trusting that over the next 10 years it’ll grow again?
Yes.
You're looking at this completely the wrong way.
The fact that it has dropped 25% just means that you will get 33% more shares for your £400 compared to what you'd have got if they hadn't fallen.
#look on the bright side
All that matters is thd price you buy and sell at. The price has fallen just as you're about to buy. Happy days.
( the above should be taken with a large pinch of salt)
I know, time in the market etc.... and theoretically today I'm buying relatively cheap compared to earlier in the year.
Its the recent loss thats makes me cautious I guess.
successful long term investing for the amateur is as much about your ability to tune out short term noise and stick to your long term game plan.
As long as you're investing in a low cost diversified portfolio (suitable for your timeframe and tolerance for risk) as above - your average buy price is the only thing that matters, and by buying monthly you'll be buying when the markets up and down. Over a long enough time frame, world markets have always gone up.
Another way to look at it is these dips are precisely the thing that drives your 7% PA average return of the MSCI. AKA "The equity risk premium" - if equities weren't volatile / dropped significantly now and again - you wouldn't earn the long term returns - significant falls aren't a fault of the system - they are part of the system.
There are a number of excellent web resources for the amateur that explain all this stuff and should help you remain calm when things are falling.
Out of interest- whats your pension invested in to fall 25% since Jan? Seems high. Tech / growth is down heavily - but world indices are not. Guessing theres some long bonds in there?
So…. markets continue to fall in the main, and as of today I’ve lost about 25% of my pension fund since January as it currently stands.
Yep, all a bit depressing!
NB I've seen bigger losses on my pensions eg right at the start of Covid things really tanked before bouncing back and then rising rapidly for 18 months.
Are we trusting that over the next 10 years it’ll grow again?
Yep, not sold anything yet - just stopped looking as it was getting depressing.....
But to be fair to the markets, we have a war with a nuclear super power and the worlds manufacturer (China) grinding to a total halt due to Covid - so you wouldn't expect markets to be peaking under those circumstances.
What's Warren Buffet's famous saying - invest when others are fearful.
Out of interest- whats your pension invested in to fall 25% since Jan? Seems high. Tech / growth is down heavily – but world indices are not. Guessing theres some long bonds in there?
The one I'm referring to is an HL SIPP created by my former employer with 90% invested in Bailie Gifford Class B accumulation manage plan - we know BG have had issues recently. Obviously there's no point moving that right now.
/ goes off to buy some Bailie Gifford Class B
So…. markets continue to fall in the main, and as of today I’ve lost about 25% of my pension fund since January as it currently stands
Mine lost similar.
S&S ISA's, down about 15%.
However, pension is coming back (wobbly, but it's getting there) and is abou 7% down on last year.
ISA's continue to slide.
In it for the long term. 🤞
BG have had some issues recently - really?
SMIT has fallen due it's composition but they run a multiplicity of funds which have fared no better or worse than their competitors.
SMIT has fallen due it’s composition but they run a multiplicity of funds which have fared no better or worse than their competitors.
All my BG funds are currently the worst performers in my portfolio, which wouldn't be so bad if it weren't for SMIT being my number 1 holding by a huge margin....
Even my "safety" Isa is taking a hit but I'm getting more shares in % terms for my monthly contribution.
Question though already have my company pension maxed out as the employers contribution is generous but I won't be there when I get to retirement age so would it be beneficial to open a private pension but with only a small contribution by myself.
Currently have some
Cash
Couple of Isas
Saving bonds with good returns (for the grandkid if and when due to complicated family stuff)
Some shares
Mortgage is nearly done (while everyone was drinking I was working 2 jobs).
Crypto for giggles.
So £100 a month into a H/L type pension for 17 odd years?
I could save that 100 a month and have a wonderful holiday while I'm not dribbling into my bib at the nursing home.
PK13 - depending on your marginal tax rate AVC’s *can* be more beneficial than a SIPP (as long as your work place fee’s and investment options are satisfactory)
If you salary sacrifice any AVC’s as a lower rate tax payer you will save ~34% on contributions (tax and N.I) - if you pay in to a SIPP as a lower rate payer the saving is only 20%.
If you’re higher rate the difference is much lower, 42% thru salary sacrifice or 40% into SIPP.
Something to consider
Question though already have my company pension maxed out as the employers contribution is generous but I won’t be there when I get to retirement age so would it be beneficial to open a private pension but with only a small contribution by myself.
Assuming your company scheme is money purchase and not final salary wait until you leave then transfer to a low cost SIPP. You can't contribute into a SIPP if you are already 'maxed out' if that means you are already hitting the £40k annual allowance.
My low cost index trackers aren't performing too badly compared to others and I'm now a big fan of passive tracker funds.
It's not final salary so I'm moving it when I leave into a low risk pot.
I've maxed out my salary potential in terms of tax. Share scheme is also being used but I'm cashing that in next year. (Maybe)
Both my wife and I need to have a proper sit down tbf her pension pot is shockingly bad she is relying on me dieing at work to cash in the work insurance 😉
Other options including never retiring fully unless heath issues get me and use that income as a substitute.
Thanks both
*Edit when i typed maxed out I mean financialy in relation to my income ie what I can afford to put in not the limit.
Company pension is also underperforming since a corporate takeover.
So £100 a month into a H/L type pension for 17 odd years?
I've done similar and a Vanguard SiPP with a the relevant Target Retirement fund is working well for me on that. Very cheap.
For non professional investors using funds tends to be the safest way of investing.
However the biggest and absolutely crucial thing is what the fund actually holds and what their strategy is.
It’s really important to do your homework and realise that with more reward comes more risk.
Taking responsibility for your investment and decisions is very important.
Nothing that pays above average return has below average risk. Diversification is key to managing risk.
Unfortunately people often believe there is some secret in investing that will magically produce huge returns.
This is why we often see investors blindly buying useless assets simply following a rising price trend. Unfortunately for them such rallies in non productive assets always end in sudden and unforeseen corrections which can be very severe.
What a load of rubbish. The safest way of investing is to do your own research, pick your own concentrated portfolio of stocks, and manage your own risk. Why on earth would letting some random fund manager do it be safer? Have your never heard of Woodford? Have you not seen the performance of ARKK? How are you gonna outperform the market when the fund you have bought owns most of QQQ (and still manages to underperform it 🤣)?
As to the recommendation of buying for the long term and riding our the dips - try asking some older folks how that worked for them back in 1999...
“What a load of rubbish. The safest way of investing is to do your own research, pick your own concentrated portfolio of stocks, and manage your own risk. Why on earth would letting some random fund manager do it be safer? Have your never heard of Woodford? Have you not seen the performance of ARKK? How are you gonna outperform the market when the fund you have bought owns most of QQQ (and still manages to underperform it 🤣)?
As to the recommendation of buying for the long term and riding our the dips – try asking some older folks how that worked for them back in 1999…“
Without wanting to turn this into an internet Willy waving fest - that’s a load of tosh.
The data is clear - the average fund manager doesn’t beat the market after costs, and it’s incredibly difficult for a DIY stock picker to beat the market over the long term too. Most people would be better accepting the average returns the market will give you for 15bps per year.
As for 1999. Anyone that owned a global index fund and carried on purchasing monthly without panicking will be well up by now, Massively so. The data is out there - buying an index fund monthly and holding for the long term works.the longer you own, the greater the probability of a successful outcome
Many of the biggest and most popular funds are index funds, that’s why there has be a huge rise in the number of ETFs (exchange traded funds). Fees are generally lower and that makes a big difference in low yield markets.
The idea touted in an earlier post that people would be “safer picking a concentrated selection of their own stocks” and “managing their own risk” is very dangerous advice and not suitable for most people.
Baillie Gifford do have a problem in that their concentrated portfolios are stuffed full of highly rated growth stocks, and these stocks have taken the biggest losses as interest rates have risen. Long term interest rates have seemingly finally stopped falling after c40 years of decline, and although we don't know how high they are headed just the fact they have stopped falling has been enough to check a lot of "certainties" - such as growth stocks can only go up. The fear has to be that BG type stocks will struggle for some time, and they will lose more money, which, because their funds are concentrated and pretty similar in opposition, means they are selling their own stocks, which causes further underperformance. Growth stock investing isn't necessarily dead forever but could very well produce very little by way of returns for several years. the historical precedent is the Nifty Fifty phenomenon of the late 1960s and 1970s which saw some of the fashionable companies of the time go bust, but others flourished as companies but took years to regain previous levels.
PK13 – depending on your marginal tax rate AVC’s *can* be more beneficial than a SIPP (as long as your work place fee’s and investment options are satisfactory)
Ooh interesting. Thanks.
Slightly compliccating factor is that if I stick money in my work pension then my employer also chucks in their NICs, which I thought bumped it up by an additional 13%.
But then from what you said, in the highercrate tax bracket you only pay 2% NICs.
Aha Gotcha. Just realised that my first stayement Was Employer nics and the second employee.
<Edit. Looks like Emp'er nics is 15.05%, so I am indeed much better off putting it into workplace pension that Sipp>
Ta muchly
As someone who's just playing with a miniscule portfolio on trading apps, where do you get your tips?
Everything bar one is down at the moment!
No Warren Buffet, I!
The safest way of investing is to do your own research, pick your own concentrated portfolio of stocks, and manage your own risk.
Might work for you but by the sound of things you are a trader rather than an ordinary investor who on the whole want a fire and forget method.
Why on earth would letting some random fund manager do it be safer? Have your never heard of Woodford?
Valid point and I have lost money to him and may or may not get some back from HL via group litigation and that's why I always go for low cost index trackers and ETFs. But people are happy with Terry Smith at Fundsmith and BG. Kryton was probably happy with BG until recently but now he sees his Vanguard life strategy fund has been tickling along in the background and over the long run will do him fine.
How are you gonna outperform the market when the fund you have bought owns most of QQQ (and still manages to underperform it 🤣)?
Just buy an index tracker for QQQ or similar, simples.
Right I've just updated my work pension plan put a few more % in the pot monthly it's performed better than I remembered.
I have the opportunity to add a one off amount to it from my own money is that a good idea to chuck in a few qiud that's earnings no interest in the bank?
Or use that money to set up a H/L fund or similar.
if you chuck money in manually you get 20% of it instantly added and can claim an additional 20/25/40% back through a tax return. Bare in mind you cant get the money back out until retirement age.
If anyone has a lump sum and are wondering what to do with it read on. Over the past few years i've been using The Wealth Club funds portfolio and have had some pretty good returns which do seem to be continuing.
lolz at the Funds vs DYOR. Maybe both so you don't pick a Woodford fund?
I only started investing "seriously" during Covid and picked a few winners with 10's or even100's times % gains (inc Crytpo/Blockchain). Things looked good, I thought I had won the market. Then things crashed and if I'd put it all in funds at the start I'd be better off right now.
Why on earth would letting some random fund manager do it be safer? Have your never heard of Woodford?
Yes a good example of how it can go wrong, although people didn't loose everything, just took a bit of a hit on his main fund.
A good reminder to not put all your eggs in one basket - split your money between a small number of diversified funds or trackers.
I only started investing “seriously” during Covid and picked a few winners with 10’s or even100’s times % gains (inc Crytpo/Blockchain). Things looked good, I thought I had won the market. Then things crashed and if I’d put it all in funds at the start I’d be better off right now.
You're confusing short term speculating with investing! You won't know if you've 'won' till you retire in 20-30 years time and then you'll see how well you've done.....
Well, this has been an interesting insight into the psychology of the collective. A whole world of opportunity out there and folks just want to buy a world index tracker and forget about it for 30 years - clearly we not singing off the same hymn sheet, nor even in the same church. I'll go back into my box now, goodbye and good luck!
A good reminder to not put all your eggs in one basket – split your money between a small number of diversified funds or trackers.
put it into lots of funds and you reduce risk, but also reward - as the chances are you're covering more and more of the market until you might as well just use a tracker (at lower cost)
Hey Jamz, I'm always interested in different methods of investing and as this is the investment thread your opinion and approach is as valid as anyone elses.
Perhaps if you didn't start your post with "what a load of rubbish" and then spit the dummy when people prefer a different approach you might get a better response.
Well, this has been an interesting insight into the psychology of the collective. A whole world of opportunity out there and folks just want to buy a world index tracker and forget about it for 30 years – clearly we not singing off the same hymn sheet, nor even in the same church. I’ll go back into my box now, goodbye and good luck!
More chkn tendies and lamboz for you then! See you on the moon 😀
Most people don't want to do their own research. Who's going to be better at research, me (an idiot) or someone who's job it is and is inevitably much smarter and clued up than me?
That's not to say I'd avoid picking individual stocks, but I do it on the basis that it's pure luck rather than knowledge. But picking FTSE 100 companies isn't exactly wild speculation. You'd be very unlucky to lose all your money.
Well said @Jamz, but also people are different points in their lives and people have different attitudes to risk.
I worship at the alter of 'fortune favours the bold'.....some losses but also some decent gains across most of the areas that i'm invested in.
I do it on the basis that it’s pure luck rather than knowledge.
That's the same basis everyone picks on, professionals included.
Well, this has been an interesting insight into the psychology of the collective.
Any analysis of investment strategies is indeed an interesting insight into psychology, most especially confirmation bias.
A good reminder to not put all your eggs in one basket
I have 50% of my pension in an HL SIPP with BG, 25% in a Vanguard SIPP split over 2 Retirement funds, and 25% in NS&I split between Premium bonds & Savings Bonds. Yes its "safe"-ish but I am risk averse in nature. I do have another Peoples Pension pot started by my new employer but not much in that yet 🙂
But picking FTSE 100 companies isn’t exactly wild speculation. You’d be very unlucky to lose all your money.
I give you:
The Hut Group
Darktrace
Cineworld
ASOS
Boohoo
Not quite all of it, but it still smarts a bit 😉
😆 I think I've only had one pick tank all the way to zero and that was game group well over 10 years ago. I think it had fallen so far it was barely worth selling so I just left it until it disappeared 🤦
I tend to stick it in funds these days. Lower fees being one key factor.
Lower fees being one key factor.
Lower fees are a massive factor, cumulatively.
think I’ve only had one pick tank all the way to zero
INTU, erstwhile owners of the trafford Centre. I bought 13 thousand of their shares on the way down.
Still sat there in my ISA with a big fat -100% ticker sat next to them 😁 £0.00
I almost bought Northern Rock shares thinking no government will let a bank fold in the 21st Century - luckily I never got round to it!
Does anyone on the thread have a financial adviser? Anyone they would recommend?
Ta
i have a mate who is a FA, back in march before the RUSvUKr i was up 30-35% on everything (mainly ftse100), except his "smaller co Trust" down 15% . ;0)
Thanks for the link, it looks interesting and I'll have a read.
I'd like some advice on what to do with my assets. I am approaching middle age and have a decent job but don't really know what to do with savings, pension, company stocks etc.
This thread is slightly amusing in that people who spend £3-4k on bikes, or £500 on lighter wheels are worried about investing £100 a month or £2k long term in a managed fund.
It's like a mild form of cognitive dissonance 🤔
EDIT: I'm not having a dig at anyone. I just find it a bit strange.
We all get slightly worried about the viability of long term investments yet we think we have more certainty over the short term stuff. Most of it is an illusion as we can't control any of it.
This thread is slightly amusing in that people who spend £3-4k on bikes, or £500 on lighter wheels are worried about investing £100 a month or £2k long term in a managed fund.
I know what I'm getting with a bike, Stocks & shares I'm less knowledgeable about. Not everyone is as astute so they come to places like this to ask pertinent questions.
Edit: posted before your second para.
Long term investing is a worry. Also, chucking loads into a pension so you can retire early is great but what if you get really ill, or even die before you can claim it?
You need a balanced approach to risk, savings, pensions etc but you also need to enjoy life too