Investing apps 2019


#42

When does it become more logical to have it in an ISA than not on Freetrade?


#43

I’d just read this MSE guide tbh.

https://www.moneysavingexpert.com/savings/stocks-shares-isas/#need


#44

Not sure I understand what you mean.

Freetrade and ISA are not mutually exclusive. You can have a Freetrade ISA


#45

My question was when would a Freetrade ISA be better than a normal Freetrade account


(Emma (still not the app)) #46

Depends how much you’re planning on investing and for how many years. No harm in having a free account for now and when you get near the capital gains or dividends limit opening an isa then


(Jordan) #47

If you haven’t got a S&S ISA it might be worth opening a Freetrade one - just be aware you can’t open another ISA of the same type and pay into both on the same tax year.

Someone correct me if I am wrong but any “gains” made on your investments will make up a “Capital Gain” and be taxed as such. You get £11,700 tax free capital gains a year.

So as @Rat_au_van says, it really depends on how much you’re investing and how much you’re going to gain.


(Emma (still not the app)) #48

Also you need to sell them for that gain to count. Buying £10,000 of Apple shares that double wouldn’t count as long as you’re still holding them


#49

Okay so I can make £11,700 profit each year tax free outside of an ISA?

Thank you for your answers - sorry if this is basic for you guys - just new to this and tryiing to learn


(Jordan) #50

From what I understand of CGT yes, but I would encourage you to make your own investigations.


(Shari) #51

I agree, I want control on which company I buy shares from, and also who I want to “support”. I’ve been thinking of investing since I was 20. Seven years later, I’m still here thinking because I don’t know where to go and how to go about it. It’s quite difficult to choose, because I’m not sure what I want is realistic.


(Emma (still not the app)) #52

I mainly invest in ETFs, it’s a lot easier than looking into specific companies. There’s a new ethical investment company called Tumelo launching soon, might be of interest to you


(Jordan) #53

I don’t particularly see the issue with using robo-advisors or using a managed-fund. I understand the wish for freedom to invest in what you want to invest but I guess its different strokes.

I will start building my own portfolio soon but for my larger deposit of funds (LISA for house deposit) I want it managed as I don’t think I would actually be much good in preserving or gaining.


(Shari) #54

I’m just here to gather information. I don’t know much about investing but it really something I would like to do. I just don’t know how. What you say is true though, I don’t think I’ll be able to manage the portfolio myself either lol


(Emma (still not the app)) #55

I recommend reading some of the blogs listed here,it really helped me. You don’t have to join the community or even use Freetrade if you don’t want but there’s some really good beginners information


(Jordan) #56

Don’t get me wrong, I read a lot about investing and I know exactly what I will/would invest in and how I would split my portfolio up - but I’d still rather have Nutmeg look after my LISA.


(Shari) #57

Thanks


(Shari) #58

:slight_smile: it’s not my case. What I meant was I’m just talking out of shallow knowledge and false beliefs. Trying the replace them with accurate info, so I can have realistic ideas of what to do just like you

I do agree with you I rather have it managed by someone else. But I would rather choose which company I buy shares from? Can you do that with Nutmeg?


(Jordan) #59

You can choose your risk appetite out of 10 - which kinda lends itself/determines to which companies/ trackers/ bonds etc and the way those are split, and they have recently released Socially Responsible Portfolios if you are that way inclined.

But to answer your question more directly, no you can’t choose what companies to invest in, hence the “managed” aspect of Nutmeg.


#60

I really can’t recommend the Money Saving Expert article that I posted earlier for a guide on the differences between the managed vs DIY platforms and the costings.


#61

This is a harder question to answer than a cost-comparison between different platforms and its also a new issue. Other than Freetrade I’m not sure if there has been another platform which provided a choice between zero platform fees (non-ISA) and platform fees (ISA). On other platforms there are unavoidable fees for both types.

As others have said, the benefit of the ISA account will really depend on how much you invest, for how long, and how much gain you make. This is very difficult to predict in advance and circumstances will change over your investing life which affect all these things.

But a simple example: Lets say you invest £250 per month (£3,000 per year) for 30 years and you achieve an average growth on your investments of 5% per year after fund fees and trading fees. After 30 years your portfolio would be valued at around £210,000
https://monevator.com/compound-interest-calculator/

Lets then assume you wanted to sell your entire portfolio in one go and the Capital Gains Tax free allowance was still £11,700. The tax you would owe would be 0.1 x (210,00 - 11,700) = £19,830. If you had paid FreeTrade ISA fees (£36/year) over 30 years you would have paid £1,080 in fees but you would pay no tax when you sold your investments.

The above assumes no inflation in contributions, fees, or allowances over 30 years (which won’t be true) and in reality you probably would not sell everything in one go. But it gives a rough idea of the value of ISAs over long periods. It also doesn’t take into account tax on dividends which would be another tax burden when your portfolio gets large if its not held in an ISA.

I suppose one option to reduce Freetrade fees is to use the free non-ISA account option until your gains get to just below the CGT threshold and then sell them (to avoid future CGT liabilities) and immediately re-purchase them within an ISA.