4 year plan to getting a £35,000 deposit

luce83_2

Hey all,

I thought I would start this blog up to give myself motivation and get some support on here. From January, the plan is to save just over £8500 a year in a 4 year ISA to finally get a deposit for a house!

At the moment I am currently saving for an art course which will be paid for by Christmas and then I can start on some serious savings.

I rent atm in a bedsit and have decided to sit it out till I've saved as I know 4 years will pass in no time. About to pay off a loan at the end of this month and have decided its no more debt for me (apart from the mortgage I plan to get!!)

Happy Blogging
Luce

MarkFromCornwall

luce83 wrote: »

Hey all,

From January, the plan is to save just over £8500 a year in a 4 year ISA to finally get a deposit for a house!

Good luck to you. Once you have some savings you might want to consider using current accounts and regular savings accounts to get a better rate of interest.

jimjames

Good luck.

I really wouldn't bother with an ISA at least for the first couple of years. You'll get far better interest elsewhere.

lalman

What about the Newcastle BS ISA - do you not think that's good for someone who doesn't want complications, money to go in one place and is a higher tax payer?

Voyager2002

lalman wrote: »

What about the Newcastle BS ISA - do you not think that's good for someone who doesn't want complications, money to go in one place and is a higher tax payer?

Someone who lives in a bedsit and is unlikely to be a higher rate taxpayer.

bowlhead99

lalman wrote: »

What about the Newcastle BS ISA - do you not think that's good for someone who doesn't want complications, money to go in one place and is a higher tax payer?

If your goal is like the OP's - to withdraw the money for a house deposit in 3-4 years - you are not getting the tax benefits compounded for the next 50 years. So you just need to see what is the best rate you can get net of tax over the next couple of years really.

If you have up to £20k it will fit in a Santander current account earning 3% gross which is 1.8 net for high rate taxpayers. Money all in one place and instant access.

Compare to the latest Newcastle rates at 1.5% fixed for a year with 90 day interest penalty if you withdraw earlier - that's not even as good as Tesco at 1.65% with 30 day penalty and neither are as good as Santander after tax.

Newcastle do have one at 1.85% but that involves a 2 year fix and 180 day interest penalty if you need to break it. Doesn't seem worth it unless you can guarantee you don't need the money and are confident you won't be able to find higher interest rates at some point in the next 2 years.

Of course, this is just comparing to Santander because it has a nice high limit on what they'll pay interest on (and other perks such as cashback on paying your bills which may or may not be of use). Santander is not the highest rate you can find on current accounts, Lloyds pay 4%gross and TSB/Nationwide pay 5%. But if you don't want 'complications' and too many accounts to set up standing orders between, Santander is a reasonable choice because it would take you a while to max out the £20k limit if you're only putting away £8k a year.

Voyager2002 wrote: »

Someone who lives in a bedsit and is unlikely to be a higher rate taxpayer.

We all make life choices to achieve our goals. If we're going to generalise based on averages, someone who is not a high rate taxpayer might struggle to save 8.5k a year given it's over 20% of takehome pay for someone on £40k. Both living in a bedsit / studio while earning a lot, or saving a quarter to a half of takehome pay, are possible, especially if you're a 'money saving expert' :-)

ShootForTheMoon

We're in a very similar position... Spent this year building up a tidy little cushion as an "Emergency Fund" so that we can really start to focus on saving for a deposit in 2015...

We're in the Bristol area, so will also be looking at around £30-40k as a deposit... Will follow your blog with interest!!

Good luck!! :beer:

luce83_2

Thanks for all the support guys, I am certainly looking forward to the challenge. With regards to my current accommodation I figured why spend all of my money on a decent flat/house and take 2/3 times longer to save. Its not that great where I live but hey 4 years will fly by in no time and I will be glad I made that call.

luce83_2

ShootForTheMoon wrote: »

We're in a very similar position... Spent this year building up a tidy little cushion as an "Emergency Fund" so that we can really start to focus on saving for a deposit in 2015...

We're in the Bristol area, so will also be looking at around £30-40k as a deposit... Will follow your blog with interest!!

Good luck!! :beer:

Good luck to you also...how long you planning to achieve that figure?

ShootForTheMoon

Also about 4-5 years too - we consistently save about £600 per month at the moment, so with a bit of focus and determination I think we can do £800 p/m... fingers crossed!!

(however OH also wants to get married in that time :eek: which might slow things down a bit - I'm determined it won't be expensive though! :rotfl:)