£10,000 any ideas

shimmasok

Hi everyone, this is my first post on this site so I do apologise if this thread is a little too specific!

My happy dilemma is that I have saved up £10,000 from work as I have and still am living at home and am planning what do do with it. At 20 i'm still not quite ready to move out but I am drawn to the idea of buying to let with the hope that I can save up another £10,000 or so in the next 3 years or so to buy a house of my own thereby giving me one to love in and one as the pension or a nice windfall in 25 years. I am also contemplating a GEB as the market does seem to be on the rise

Does anyone have any good advice for me, all input is greatly appreciated

Thank in advance

shimmasok

oh and i've already used my £3k isa before anyone suggests it

zag2me

You might end up losing your 10k with the way BTL is at the moment I wouldnt bother, its only really worth it in a rising houseing market. I split my savings 3k Isa, 3k regular saver with halifax and the rest in a high interest current account.

innovate

if you're a boy, can I marry you pleeeze, shimmasok? £10K savings stashed away at 20....my kinda guy! I also like the idea you want to buy a house to "love in" :rotfl:

If you are a girl, I am sure Yorkshireboy will be along any second now...........

Now to the serious bits.

It depends what risks you want to take - if you are happy to contemplate stockmarkets, you best go to an IFA (one that someone recommends to you) for a review and proposal.

If you are risk averse, check out Martin's articles on savings and investments . If you want to open new savings accounts, check out Quidco or TCB for a "quick kill" cashback.

You might also want to look at stoozing

innovate

Various UK stockmarket predictions

shimmasok

Yes innovate I am a boy and I hope I can love and live in my house! Had nothing else to spend mony on, no point wasting it so living at home was a perfect opportunity to save! not massivley keen on risks to be honest. Was not really to bothered about the price of the house rising significantly as long as the market stayed the same, I was more hoping to let someone else pay off the first 3-4 years of my mortgage if I can let it or if all is going well have the two houses on the go, did have a look at some of the articles, wasn't too keen on stoozing at the moment because I don't want to ruin my credit rting before getting my first house, haven't looked at quidco or tcb yet though so will have a look now

innovate

shimmasok, thanks for clarifying the boy/girl thing, hope I'm still in with a chance !!

Stoozing doesn't ruin your credit rating if done properly - quite the contrary, having a credit card (or two) helps build your credit record. (BTW are you on the Electoral Roll? uuh umm and do you pay your poll tax.......)

If you could get £10K of 0% credit on a rolling 4-year basis, you would make some £1,200 over 4 years at 3% (conservative) interest rate.

You obviously need to manage any stooz pot meticulously, otherwise it can cost you dearly. But if you have some basic discipline to your money (which you seem to have, how else could you have accumulated £10K savings by now), this should not be an issue, and you also can get out of it any time you like if it gets too much.

Not trying to talk you into stoozing, just thought I mention it in case you weren't aware this could be a source of additional capital. But please don't go anywhere near it if you feel in any way uneasy about it!

innovate

One more thought for tonight. Getting on the housing ladder with £10K or even £20K, even if it is buy-to-let, will most likely not work out financially. I obviously don't know your family circumstances, but assuming your parents plan to leave you some assets at some stage, it might be prudent to plan now how this can be done in the most tax efficient way, i.e. to avoid as much inheritance tax as possible. I know it's a bit depressing to think of such things, but we all have to be realistic....

If your parents gave you, say £3K (tax free) every year from their assets, they wouldn't save their assets for the taxman but for their offspring. A joint investment into a buy-to-let property might earn money for you/your parents rather than stacking up money to pay a tax bill. If this could be an option in your circumstances, an Accountant with a good grasp on IHT could probably provide you and your parents with pertinent advice (I wouldn't seek the advice of an IFA for IHT because there isn't usually anything 'in it' for an IFA)

biblejohn

innovate wrote:

One more thought for tonight. Getting on the housing ladder with £10K or even £20K, even if it is buy-to-let, will most likely not work out financially. I obviously don't know your family circumstances, but assuming your parents plan to leave you some assets at some stage, it might be prudent to plan now how this can be done in the most tax efficient way, i.e. to avoid as much inheritance tax as possible. I know it's a bit depressing to think of such things, but we all have to be realistic....

If your parents gave you, say £3K (tax free) every year from their assets, they wouldn't save their assets for the taxman but for their offspring. A joint investment into a buy-to-let property might earn money for you/your parents rather than stacking up money to pay a tax bill. If this could be an option in your circumstances, an Accountant with a good grasp on IHT could probably provide you and your parents with pertinent advice (I wouldn't seek the advice of an IFA for IHT because there isn't usually anything 'in it' for an IFA)

Doesnt inheritance tax only apply if you have over 250k of assets? In my familys case they wont have anything near that amount.

But good advice though - my friend has been doing something similar this last 6 months with his parents. They own about 4 large houses in Birmingham + several businesses.. So, he has been getting them to transfer the properties into his name to save on iht. How he did it was that they still own the land but he owns the house - or something like that. So they still have the security that he cant just sell the places until they have died.

innovate

You are right, there is a threshold for IHT - currently £275K, and there has been speculation in the press that this might get significantly increased in the next budget. We shall see....

I don't know the exact figures, but a huge number of people will have estates worth more than the threshold by the time you add up property, savings, investments, life insurances, valuables etc.

HMRC pages on IHT

cheerfulcat

shimmasok wrote:

Hi everyone, this is my first post on this site so I do apologise if this thread is a little too specific!

My happy dilemma is that I have saved up £10,000 from work as I have and still am living at home and am planning what do do with it. At 20 i'm still not quite ready to move out but I am drawn to the idea of buying to let with the hope that I can save up another £10,000 or so in the next 3 years or so to buy a house of my own thereby giving me one to love in and one as the pension or a nice windfall in 25 years. I am also contemplating a GEB as the market does seem to be on the rise

Does anyone have any good advice for me, all input is greatly appreciated

Thank in advance

Well done on saving so much! As you are contemplating a fairly short term, deposit accounts would be the safest place for your cash. If you can tie your cash up for a fixed period, there are some reasonably attractive rates available right now. Alternatively, you could buy Premium Bonds - to be honest, I don't rate PBs very highly as savings/investment products but if you are prepared to gamble the interest you would have had in a savings account, and don't mind ending up losing money to inflation if you don't win enough to cover it, they are a lowish-risk way of having a flutter.

GEBs are a lousy product and I would not touch them with my worst enemy's longest bargepole.

HTH, and good luck

Cheerfulcat