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Answers to YOUR Questions

See what's bugging others. 

And what our experts say.

I currently have my children's Stocks & Shares ISA's with H&L however I am not that savvy with investing so I am thinking of moving it over to Wealth Simple and allowing them to do it for me. Would you recommend this or are there other roboadvisors you would suggest? I am happy to leave the money in long term until they are about 18 so looking at an 'ambitious' risk. I also have the same account with H&L and will potentially swap also.

Funmi, LDN

12 October 2020

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Holly Mackay

Fidelity has recently announed no fees on Junior ISAs - they also have ready-made investment options. If you want to keep it super simple I would look at Nutmeg, Wealthify or Wealthsimple - you can read more about them on our Best Buys pages. 

Hi Holly, thanks for the guide on how to save for retirement. A key question for me and my fifties friends is, how much retirement income do we need (aka when can we afford to retire?) We’ve found the PLSA-suggested ‘retirement living standards’. What do you think of them?

Rory, Ham

28 August 2020

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Susie Bewell

“How much will I need to retire” is a question asked of us frequently but understanding how much you need to save to retire is difficult to define as not everyone is the same. It is often only when you are nearing retirement that you would really understand what your income needs will be and often that may be too late to plan. For an investor in their thirties, understanding what income needs will be at age 68 is almost impossible to imagine.

Fortunately, over the years, experts have devised useful rules of thumbs to follow to help us on our way to successful retirement planning. Most experts suggest that you will need 70-80% of your pre-retirement income after you retire. It is assumed that mortgages, debts and dependents are a thing of the past, leaving you with lower expenses.

I think the PLSA Retirement Living Standards do really well to capture what different incomes in retirement would cover, all the way down to what holidays or gifts for members of the family might look like. I particularly liked the examples given that highlight costs you might not have thought of – help with maintenance around the house, for example.       

Of course everyone if different, but this is a nice way to get you thinking about what could be important to you, and put some “meat on the bones” of your plan.

Hi Boring Money, My question was about a man offering a 22.2% average return on his stock picking ability. His name is Chris Chillingworth, this is his promo video: https://www.youtube.com/watch?v=WSbBJ6ttgL0 and here is his rather pricey monthly stock picking service: https://thecleantrader.com/stockpicker/ I've tried to find reviews of his services but cannot find them anywhere except on a really old forum of his older product 'Spreedbet Beginner' where people have said they are blocked pretty swiftly on Twitter etc if they raise an issue. He's given me previous stocks such as Sage plc as a sample of his ability to pick good stocks, but I thought after our contact he could easily look back at history and say he owned one of these stocks. I just don't want to squander £20 - £57 per month on someone that will provide me inferior stock picks and I could do better just managing my own portfolio. What is even more odd is that he cannot be found on Companies House which rang alarm bells a little as even if he has his money in an ISA surely he must have to file for sales of his books, courses and stock picks? Obviously, like any investor I want the best return for my money but I don't want it to be spent on stock picks that may be useless in the next few years because I've been duped into thinking he can provide above average returns. 22.2% is a phenomenal average return so I'm not sure what to do. I guess I do have a little bit of FOMO as it could be legitimate, but it also may be a well crafted marketing ploy. I would like your opinion on this matter as I have no idea what I should do. Kind Regards, Max

Max, Lincolnshire

27 August 2020

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Hi Max

With no disrespect to the man you mention who I do not know personally, this sounds like a really really bad idea. It’s like me saying that it will be sunny next year for an average of 4.5 hours a day. I could give the logos of every FTSE100 company to my cat and she could pick the winners  - the skill is doing this day in and day out for years – anyone can get lucky over the short term. I never trust anyone who says they can pick winners all the time or make x% a year.

The boring truth is that investing is not alchemy or picking winners all the time – it’s balancing the risk, spreading your bets around different markets, sectors and regions – and being happy with annual returns of about 5% - 6% a year if you invest in shares over the long-term. Shares should do better than cash but you won’t always pick the next Amazon. I think you need to stop expecting to make more than that or you’ll get stuck in a loop of chasing returns which are not sustainable.

I would stick to funds not shares – these are collections of shares which minimise the risk of anyone thing going belly up. Be honest about your timeframes – if it’s less than 5 years then shares are a bit too risky. If it’s 10 years + you can be more spicy. Have a look at our Best Buys tables for  an investment platform you like the sound of. Look at their fund lists or Best Buy lists. Pick a mix of global funds which are diversified. As a guide, I think most people should have between about 8 and 20 funds depending on how much you have.

These are all generic statements – I don’t know your full financial circumstances eg do you have expensive debt you should be paying off first? Do you have a pension? Have you got a cash buffer of about 6 months’ income to protect you from financial shocks? Etc But I do know that anyone claiming 22.2% returns on average is deluding themselves about their capabilities. I also know that anyone involved in Spread Betting is someone I would run a mile from

Good luck,

Holly

Hi, I'm 66, been retired 4 years, living on savings and now UK Pension. I retired when I returned to the UK and so am not familliar with ISAs and SIPPs. When I look to join up with Fidelity they ask if I want a SIPP or ISA - Ooops fallen at the first hurdle. I am not looking for a pension as such, more somewhere I can invest some cash from. Can you please give me a steer. All the Best and Stay Safe...Wilson

Wilson , ARL

19 August 2020

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Susie Bewell

What wrapper to use for your investments can be different depending on your circumstances. Between the tax wrappers of pensions and ISAs, the benefits come down to tax treatment as you put the money in, and as you draw it out. For both pensions and ISAs, the investments held within the “pots” are not subject to tax.

As you are now retired, some of the benefits of using a pension wrapper reduce: although you would still receive tax relief on the money you put in, you are limited to how much you can put into a pension by your earnings (and pension income doesn’t count). I have assumed you don’t have any earned income now - but you can still put in £2,880 a year, up to the age of 75, which is then grossed up to £3,600. As you draw the money out, you can take 25% tax free, but the rest is taxed at your marginal rate…so if you are a higher rate tax payer, it will be at the higher rate.

The amount you put into an ISA is currently a maximum of £20,000 each tax year. You don’t get anything added to it as it goes in, but it is not taxed as you take it out. Money above the annual subscriptions could simply be held in a general investment account (GIA), where there are no tax wrapper benefits.

For the GIA, ISA and SIPP the choices of underlying investments on the Fidelity platform should be the same.

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