Am I on the right track?

B3AR

Good evening all this is my first post so be gentle as I'm not sure if I'm in the correct section.

Me and my partner have recently had a baby and are currently living with my parents and all the savings we had have gone towards paying off bad debt we had accumulated and Christmas presents :santa2: (very organised since its not December yet :beer:). We are now looking to start saving for a place of our own, our ideal move date is before our daughter starts school preferably before (3-4 years). At the moment we are able to save £600 per month as my partner is on maternity leave until June, when she goes back to work we will be able to save £1100 per month maybe more. My question is; what is the best way to save firstly the £600 per month until June and secondly the £1100 after...

Here is my very basic understanding, as I'm allowed to save £5340 in a ISA my plan is to put in £600 per month until the end of the tax year. Once we are into the new tax year the plan is to open 2 ISA's (me and my partner) and put the full amount in for the year which combined will equal £10680 and put the remaining money into a normal savings account...

Now over to you guys, as I said before my knowledge in this area is very basic so I could be way off the mark with my idea. Are there any fundamental flaws or pitfalls I am missing? Any advice or criticism is welcome as I could do with getting this right from the off...

Many Thanks

B3AR

tushingham

I think you are on the right track.
Its smart thinking and regardless of your salary or tax position (unless you are non-taxpayers and even then its debateable!), the basics remain the same for a 3-4 year window. You need something 'safe' and earning a fair to good rate on interest. CASH ISAs are your best bet. Make sure you've paid off any other outstanding debts that cost more than the interest rate from your isa before you start contributing to an ISA. Go to the isa page on this website to find the best deals. If you definitely dont want to touch the money for 3 years then you could go for a 3 year fixed isa for a better rate. Info on the isa page.

You've come up with a good plan imo and I wish you the best of luck with it

t

B3AR

Hi Tush, thanks for the reply I'm glad I'm on the right track...

I do have another question(s) for someone to answer; when I open an ISA am I only allowed to make 1 monthly deposit to it or can I shift money to it if I have a little spare? Also when the tax year ends does a new ISA automatically open and does my previous ISA keep earning money at the same interest rate? Sorry if this is all simple stuff I'm just struggling to get to grips with it...

Many thanks

B3AR

Lokolo

These are all rules on the individual product you choose. Some only allow one deposit (Usually fixed term ISAs). Some require a monthly contribution (Regular Saver ISAs). Some you can deposit willy nilly whenever you want (usually all the others).

Your ISA will continue to earn interest yes, but some providers drop their rates after time, so you want to keep an eye on this. If the interest rate drops too much, you can transfer it to a better paying one. When you do transfer, you must fill in an ISA transfer form with the new provider.

http://www.theaa.com/savings/access-isa.html

This is currently the best paying Instant Access ISA. You can withdraw and deposit whenever you like (although I think the idea is that you won't be withdrawing!).

Keep an eye on the interest rate, when it gets lower than others, you can open a new one elsewhere and transfer (by the ISA transfer form) the money there.