Advice on Saving

Dedge77

Whilst I am in the process of selling my flat I have been looking at the best ways to save the money I will make for the future.

I had planned on opening Isa accounts for both myself, my partner and my two kids but with the recent credit crunch I was looking for some advice on what would be the best method.

I should be making roughly 30k after fee's and paying off existing debt. I will then be moving in with my partner who is in a council flat. The plan is to put the money away until we find a house that we can use it as a deposit, so although I would like to put the money in for at least 5 years the right place might come on the market at anytime.

I was wondering if it would be worth investing into share ISA's in the current climate or stick to cash ones.

Any help advice would be much appreciated as I aint ever been good with cash before so wanna start saving now.

Kev

Farway

Given current market problems, and you will need it for house deposit, and thus have no real control over time scale when you may need to withdraw the money, I would stick strictly to cash

Imagine if found your ideal house last Monday and now you wanted it for the house deposit this week and it was in share ISAs, not a pleasant prospect

[Deleted User]

Hi,

Generally investing is considered long term so if you think you'd need access to the money maybe earlier than 5 years I wouldn't consider it. For saving I'd suggest the following:

1. Generally ISA's are a good place to start:

http://www.moneysavingexpert.com/sav...gs-without-tax
and http://forums.moneysavingexpert.com/....html?t=401374

2. Regular savings accounts are good too:

http://www.moneysavingexpert.com/sav...vings-accounts
and http://forums.moneysavingexpert.com/....html?t=608697

Regular savings accounts are generally a good place for new money e.g. monthly pay cheques, however if for example you have £3k in a 6% high-interest bank account drip-feeding into a 10% regular savings account then you're essentially getting 8% interest on average for your £3k which beats most fixed rate products - albeit with a bit more work.

3. If you want something with a little less work then fixed rate savings accounts are a good option:

http://www.moneysavingexpert.com/sav...interest#fixed
and http://www.thisismoney.co.uk/saving-...&in_page_id=50

4. One other thing you might like to consider is getting a decent instant access savings account:

http://www.moneysavingexpert.com/sav...st#topaccounts
and http://www.thisismoney.co.uk/saving-...&in_page_id=50

5. Finally if you're a higher rate tax payer then NS&I's 3 and 5 year Index Linked Savings (http://www.nsandi.com/products/ilsc/index.jsp) look good, paying 1% above the RPI inflation rate. Currently this is 4.8% so that’s a rate of 5.8% overall.

The attractiveness of these is that the savings are tax-free meaning it's better for higher-rate taxpayers. Basic rate taxpayers would need to earn 7.25% in a normal savings account to match this, while higher rate taxpayers would need 9.66%.

One thing to note is if inflation drops then so does the rate for these savings. It'll always be higher than inflation and tax free though. The cash must be left there for at least three years thought and at least £100 must be deposited (maximum is £15,000), so it's not for those who want a short term place to save.