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Seeking security
Q:
My wife and I have transferred ISAs, shares and unit trusts totalling around £135k to the Hargreaves Lansdown Vantage Service. The investments are held in the name of Hargreaves Lansdown Nominees, but we remain the beneficial owners.
In view of the recent problems in the banking sector I am wondering what our position
would be if Hargreaves Lansdown became insolvent. Would the full value of our investments be returned to us, and how straightforward would this be to arrange?
Many thanks.
Mr R Taylor, via email
A:
Anna Bowes replies:
Hargreaves Lansdown’s financial situation has absolutely no link to the situation in the banking sector – HL is an independent financial adviser (IFA).
Within the Vantage Service, the underlying investments remain invested into the underlying investment companies and, even then, are ringfenced should there be problems with these underlying companies. So your money is secure, although not guaranteed.
In the unlikely event that HL were to become insolvent, you would still be able to access the money invested in the underlying funds by simply writing to the companies and asking for the money to be encashed. However, there would be no reason to do this unless you need the money, as encashing your ISAs would mean that you lose the allowances forever.
HL has a section on its website entitled ‘How safe is your investment?’, which may help put your mind at ease.
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Repayment dilemma
6 September 2008 [0 comments]Q:
I own a second property, which I rent out for £300 per month. The majority of this money is currently used to pay off the mortgage repayment, insurance, rates and any repairs. I am not concerned about the fact that I do not make money on the house, as it is appreciating each year in value and the longer-term plan is to use this house to supplement my pension in retirement.
At the moment, the mortgage is £170 per month and almost £80 is made up of interest. It is a small mortgage, currently £15,000. I have this money invested in stocks and shares and was considering taking this money and paying off the mortgage.
There are obvious tax implications with this, but I was thinking that I would be better off paying the tax (if it was less than £80) rather than paying £80 per month in interest. Can you please advise if this would be a wise move or should I just leave the money invested in the stocks and shares and continue to have the tenant pay off the existing bills?
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