Hi, I am 67 years old and I want to know the best way to invest £10,000 for growth rather than income. I would like to do this online and to be able to save money on fees. I am after a platform that is secure, straight forward and comes highly recommended and I am interested in investing £20,000 in a SIPP, and want to know if it would give me a little monthly or yearly income? Hope you can help. Thanks.
If you have £10,000 to invest then an online platform is probably a good idea. If you haven’t used your stocks & shares ISA allowance for the year (£15,240) then it probably makes sense to buy the investments in the ISA wrapper.
For sums like £10,000 you want a platform which charges in % terms with no fixed £ charges – proportionately this last option would be expensive for you. If you also are thinking of a SIPP of £20,000, then you want a platform which has no extra fixed charges for a SIPP.
In this case your best option is Fidelity or Hargreaves Lansdown. Fidelity costs 0.35% a year on both the ISA and the SIPP amounts. Hargreaves charges 0.45% on both. They are both pretty good. If you want to buy shares as well as hold funds (baskets of shares which a fund manager chooses and runs for you) the I’d go for Hargreaves. And remember they’ll charge you about £10 a pop for buying a share – so for small amounts you are probably better off thinking about funds which also spread the risk around. There is a cheaper option for ISAs (Charles Stanley) but they levy a fixed fee for SIPPs which makes them less appealing for you.
On the other hand, Fidelity has more help for less experienced investors. Have a look at their Pathfinder tool.
So for your £30,000 all in , you will pay Fidelity £105 or Hargreaves £135 each year. Fees are deducted monthly from your account. On top of that, you’ll also pay a fund manager to pick, manage and run your investments – this will be about another £225 for your £30,000 total.
You ask whether your SIPP could pay out an income. You can invest in equity income funds today which could pay you an income (not fixed or guaranteed) of roughly £600 a year on your £20,000 invested. This could supplement the State Pension which you are now obviously eligible for. That £20,000 will be invested in the stock market and can of course go up or down.
Just be aware...
We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA.
This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.
We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.