What would you do?
Just moved to the UK last year, and yes, I’ve already read the canonical “flowchart”. Wanted to get a slightly more balanced take from this sub rather than UKPF which understandably leans a bit more conservative.
Single, 32, tc 220k (base 160k + fixed 60k yearly allowance paid monthly). Pension is 3% employee contribution (of base) and 5% employer. Bonus is usually 10–15% fixed, which I’ll probably just use for travel/leisure.
Current setup:
- Cash ISA from last tax year maxed
- Managed S&S ISA this tax year maxed
- Minimal amt in checking account
- Expecting to save 4k/month going forward
- Assume the above is NW. Not saving for something in particular. No debt. Thinking of house maybe in 3-4 years when I start a family
Now that I’ve fully used my ISA allowances, question is WWYD in my position? Basically need an action plan for another 40k this tax year and then around 28k per year after that (after taking out 20k to next year isa allowance).
A few thoughts
- I’ve considered getting a financial/tax advisor, but the general consensus here and on UKPF seems to be that it’s overkill at this level. But then again managed ISA is never endorsed here but I just think 0.5% fees at my current investment is the kind of convenience/peace of mind I am willing to pay to have IM manage things for me (which cost like 1x nice dinner per year at this level of investment).
- Pension contributions: people here often say to max them out, but not sure if appropriate for me since I don’t necessarily plan to stay here forever. Home country also doesn’t have QROPS providers, so portability is also concern. So question now is can I get away with just putting everything post-allowance to GIA at this point, and if so...
- Is it actually that crazy to just start using a GIA at this point for these remaining amount? CMIIW but if I invest 40k and get something like 7.5% return, I can still mostly rely on the annual 3k exemption in the near term. And unless I’m constantly realizing gains it’s not like I immediately get hit with 24% tax on everything. Maybe I’m missing something/potentially hot take, but I sometimes wonder whether the obsession with wrappers gets overstated(?). Obviously once the portfolio gets into the 400–500k range the strategy probably changes, but right now (when money I'm putting in won't reach 200k per the above assumption) wonder whether it’s perfectly reasonable to just open a GIA and enjoy life instead of doing a PhD in tax optimization over a potential, future 24% CGT bill.. again CMIIW.
Appreciate any thoughts. Thanks!
EDIT 1 [7.30pm 31/05]: Truly overwhelmed by the kind views and level of discourse people shared here. Going through the comments and replying now - thanks a lot!