Help Regarding Saving Options

thomaswebb

Hello All,

My partner and I are looking at setting up a few savings accounts, but it is our first time in this position, so we could use a few educated opinions!

I've been in some form of debt for a long time now, ever since being a student (must be six years now). I've been working for two and a half years though, and finally, along with great support from my girlfriend, we have now cleared all overdrafts/credit cards. I still have my student loan, but I'm happy with that ticking over in the background whilst the interest rate is still good.

My girlfriend and I have spoken a lot about the future and where we want to be, and we have a target of savings that we wish to accrue over the next three years. This has given us a target of how much to save each month, which we both agree is very achievable based on our monthly outgoings. For ease of calculations in this thread, I'll put that we can save around £1000 per month.

We are now looking at what savings accounts are needed. Of course, we would like to get as much extra on this cash as we can, giving us room for some nice extras once we start our family, and a buffer in case of any unforeseen bumps along the way. My gf doesn't have a pension, so we would like an extra savings account to put a little in each month for the much longer term future.

Our current thoughts are an ISA each and a couple of easier access saving accounts. I was thinking a 1 year fixed interest ISA and a 3 year fixed interest ISA. This gives us good interest over 3 years relative to todays rates, but with the option of having another ISA that we can change each year in the hope that rates improve. We will be starting them from 0, and will be looking to pay in around £420 a month into each (based on a £1000 monthly saving total).

We would also like one easier access saving account which we can put £100 a month into in case something bad happens and we need a bit extra, but would still like to earn a good bit on it. The final savings account would be one for her 'pension', which we would put the remainder in (£60).

As I said earlier, this is the first time either of us are in this position, so we have no idea about the distinctions between ISAs. We have researched a bit, but any opinions here will help! We need to be able to pay in each month, but don't have a lump sum to start with. Any thoughts and suggestions are very welcome, and if you think the plan is awful please say!

Thank you for your time.

Eponym

Why doesn't your girlfriend open a pension, rather than using savings accounts? For tax reasons alone a pension would be more beneficial.

atush

I agree you both need pensions, but you do need a cash savings buffer.

Ideally, 6 months of salary/spending is best so aim for that. Fill your ISAs and then put some into instant access for emergencies. Then you open 2 new ISas the next year. Once your smaller emergency instant access pot is as big as you need it, then open regular savers.

But do check if your employers have a pension scheme and join it if they do. If they don't , open a personal pension.

Congrats on your new debt free life!