Ideas for reallocating my savings?

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bobobski
bobobski Posts: 771 Forumite
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in Savings & investments
Hi all


With two regular savers about to mature and very few direct debits in my name I'm running out of ideas of where to put my money and would appreciate your input yet again please :)


So, I'm unmarried/no joint bank accounts, looking to buy a property sometime between now (unlikely) and in 18 months (more likely) so not keen on locking money away, currently contributing 7% to my salary sacrifice pension (matched 7% by my employer - this is the maximum they'll match) and with about £28k to my name. In case relevant, I'm a higher rate tax payer.


Currently my money is spread as follows:
- £5k BOS Vantage x 1 (two direct debits used for this) - 2%
- £5.8k-ish Halifax HtB ISA - 3.5%
- £3.6k First Direct regular saver - 5% (maturing later this month)
- £6k Nationwide regular saver - 5% (maturing later this month)
- £1.5k TSB - 3%
- £6k Tesco x 2 (no direct debits - old issue) - 3%


I should point out that I have used my FlexDirect entitlement.


In addition, I aim to save at least £1k a month - in bad months (like this month) it can be as low as £500 but in good months it can be more like £1.4k.


My planned reshuffle of accounts looks like this:
- £5k BOS Vantage x 1 (two direct debits used for this) - 2%
- £1.5k TSB - 3%
- £6k Tesco x 2 (no direct debits - old issue) - 3%
- £12k Skipton LISA (looking forward into April for this - includes whole Halifax HtB ISA and 2018-2019 allowance) - 0.75%
This accounts for approximately £24.5k but I query whether it is effective to put 2018-2019's LISA contribution in at the front end of that tax year or better to keep the £4k somewhere else until March 2019 for higher interest. Even using the LISA to its fullest, that still leaves a hole of about £4k- waiting until the end of the next tax year would leave a hole of £8k.


In terms of regular savers, I intend to open the following (and drip-feed if necessary in "lower saving months"):
- £300 First Direct - 5%
- £250 Nationwide - 5%
- Open a new HSBC account, move my last remaining direct debits to this (via a switch for full gain) and then open the regular saver of £250 @ 5%
- If possible, keep my HtB ISA open for the 3.5% interest but not sure if this is possible if I'm doing a full transfer to the Skipton LISA?


This allows for £1,000 regular savings per month at an average of 4.7%. If I need more, I could open the Bank of Scotland regular saver for another £250 at 2.5%.


Any thoughts on how to optimise this plan?


Thanks in advance :)

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  • badger09
    badger09 Posts: 11,210 Forumite
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    bobobski wrote: »
    Hi all


    With two regular savers about to mature and very few direct debits in my name I'm running out of ideas of where to put my money and would appreciate your input yet again please :)


    So, I'm unmarried/no joint bank accounts, looking to buy a property sometime between now (unlikely) and in 18 months (more likely) so not keen on locking money away, currently contributing 7% to my salary sacrifice pension (matched 7% by my employer - this is the maximum they'll match) and with about £28k to my name. In case relevant, I'm a higher rate tax payer.


    Currently my money is spread as follows:
    - £5k BOS Vantage x 1 (two direct debits used for this) - 2%
    - £5.8k-ish Halifax HtB ISA - 3.5%
    - £3.6k First Direct regular saver - 5% (maturing later this month)
    - £6k Nationwide regular saver - 5% (maturing later this month)
    - £1.5k TSB - 3%
    - £6k Tesco x 2 (no direct debits - old issue) - 3%


    I should point out that I have used my FlexDirect entitlement.


    In addition, I aim to save at least £1k a month - in bad months (like this month) it can be as low as £500 but in good months it can be more like £1.4k.


    My planned reshuffle of accounts looks like this:
    - £5k BOS Vantage x 1 (two direct debits used for this) - 2%
    - £1.5k TSB - 3%
    - £6k Tesco x 2 (no direct debits - old issue) - 3%
    - £12k Skipton LISA (looking forward into April for this - includes whole Halifax HtB ISA and 2018-2019 allowance) - 0.75%
    This accounts for approximately £24.5k but I query whether it is effective to put 2018-2019's LISA contribution in at the front end of that tax year or better to keep the £4k somewhere else until March 2019 for higher interest. Even using the LISA to its fullest, that still leaves a hole of about £4k- waiting until the end of the next tax year would leave a hole of £8k.


    In terms of regular savers, I intend to open the following (and drip-feed if necessary in "lower saving months"):
    - £300 First Direct - 5%
    - £250 Nationwide - 5%
    - Open a new HSBC account, move my last remaining direct debits to this (via a switch for full gain) and then open the regular saver of £250 @ 5%
    - If possible, keep my HtB ISA open for the 3.5% interest but not sure if this is possible if I'm doing a full transfer to the Skipton LISA?


    This allows for £1,000 regular savings per month at an average of 4.7%. If I need more, I could open the Bank of Scotland regular saver for another £250 at 2.5%.


    Any thoughts on how to optimise this plan?


    Thanks in advance :)

    Initial thoughts:

    Don't wast 2 DDs on the switch to HSBC. Unusually, 2 SOs will do the trick.

    M&S current account - switch to it (£185 I think) and also open monthly saver 5% up to £250 pm. Also needs 2 DDs included in the switch but they don't have to pay every month, so can be annual.
  • bobobski
    bobobski Posts: 771 Forumite
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    badger09 wrote: »
    Initial thoughts:

    Don't wast 2 DDs on the switch to HSBC. Unusually, 2 SOs will do the trick.

    M&S current account - switch to it (£185 I think) and also open monthly saver 5% up to £250 pm. Also needs 2 DDs included in the switch but they don't have to pay every month, so can be annual.


    Very helpful, thank you Badger! So glad you pointed out the HSBC standing order option.


    If I'm switching to HSBC for the £200, fair enough that leaves me with two direct debits but it leaves me out of a donor account. I'll keep the M&S account in my back pocket for now and if I need another regular saver I'll look at opening a donor account for the switch :)
  • badger09
    badger09 Posts: 11,210 Forumite
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    bobobski wrote: »
    Very helpful, thank you Badger! So glad you pointed out the HSBC standing order option.


    If I'm switching to HSBC for the £200, fair enough that leaves me with two direct debits but it leaves me out of a donor account. I'll keep the M&S account in my back pocket for now and if I need another regular saver I'll look at opening a donor account for the switch :)

    Have you thought about opening an additional account at either BoS or Nationwide, on which you set up SOs or DDs as required for the preferred switch incentive?
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
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    bobobski wrote: »
    This accounts for approximately £24.5k but I query whether it is effective to put 2018-2019's LISA contribution in at the front end of that tax year or better to keep the £4k somewhere else until March 2019 for higher interest.

    I'd say don't bother putting 2018/19 allowance into the LISA until March as you can earn more interest outside of the account. Keeping the £4000 in a different account, even if just the best paying easy access savings, will be better than earning only 0.75% inside the LISA. The real advantage of the LISA is the bonus, so just use it for that.
  • bobobski
    bobobski Posts: 771 Forumite
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    badger09 wrote: »
    Have you thought about opening an additional account at either BoS or Nationwide, on which you set up SOs or DDs as required for the preferred switch incentive?


    It's on the cards, but at the moment my priority is finding a place for the money I have before accumulating more money - a good problem to have, I know! :)
    ValiantSon wrote: »
    I'd say don't bother putting 2018/19 allowance into the LISA until March as you can earn more interest outside of the account. Keeping the £4000 in a different account, even if just the best paying easy access savings, will be better than earning only 0.75% inside the LISA. The real advantage of the LISA is the bonus, so just use it for that.


    That's a good point - even the 1% I have on my Nationwide easy access beats the LISA rate (although it may be a finer line when you factor in interest on the bonus payment). I'll look at opening one of the top easy access savers for the £8k-ish unallocated. Thanks!
  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
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    bobobski wrote: »
    It's on the cards, but at the moment my priority is finding a place for the money I have before accumulating more money - a good problem to have, I know!
    Well another BOS account would be another £5k at 2%, as well as the bonus.
    Eco Miser
    Saving money for well over half a century
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