New Saver in need of a plan

gallaghb

Hi,
I have been in debt for a few years but for the past 18 months have been doing everything to pay it off.
We're on decent salaries so have been able to pay off £2300 per month so far this year and we'll finally be debt free at the end of this month.

I'm looking into the best way to start saving £2300 per month and wonder what peoples thoughts are? Our plan is to save for 2-3 years and then get a mortgage.

1. We both bank with First Direct so will take advantage of the 6% regular saver. £600 per month between us.
2. 3 x TSB Classic Plus accounts, 1 each and 1 joint seems to be allowed, £6k total paying 5%.
3. Nationwide Flex Direct, £5k in 2 accounts at 5% but only for 1 year.

I didn't really want to have to get a Santander account as have to move Direct Debits etc but may have to... Guess I need to work out how much I will gain from that and see if it is worth it to me.

I'm a higher rate tax payer but I guess that doesn't matter with the new interest allowance unless I earn £500 interest then I assume be better to have accounts in my wifes name as she is a basic rate payer.

Thanks in advance.

Archi_Bald

Other Regular Savers:
6% M&S (£250) and HSBC (£250)
5% RS at TSB (£250)
4% RS at Lloyds (£400)

Thrugelmir

Saving for a mortgage?

gallaghb

Thrugelmir wrote: »

Saving for a mortgage?

Yes saving for a mortgage

Krash420

Why would you not consider a Santander 123 account? Remember that youll earn interest on balances upto 20k, and get cashback for paying mobile, and household bills via direct debit in the account. This should help you boost your savings further if anything.

But do remember the £2 monthly fee.

gallaghb

Krash420 wrote: »

Why would you not consider a Santander 123 account? Remember that youll earn interest on balances upto 20k, and get cashback for paying mobile, and household bills via direct debit in the account. This should help you boost your savings further if anything.

But do remember the £2 monthly fee.

I'm thinking about it but I don't really want to move my current account. Plus I quite like First Direct!
But think I can just move couple of direct debits and make sure I meet minimum pay in.
It seems there's a few more reg savers I can use first paying more. Then after first year will put £20k into Santandrr assuming they're still offering same account.

Archi_Bald

gallaghb wrote: »

I'm thinking about it but I don't really want to move my current account. Plus I quite like First Direct!

You don't have to move your current account as you can have as many of them as you want / as you get accepted for. I still have over 20 myself though some are just sitting there with zero balances, waiting for the next round of switching offers.

If you are in credit, the Santander 123 undoubtedly offers better value for money than an FD current account does. Apart from the potential for interest, the pays 100% more cashback than the FD. I make around £10/mth in cashback. There are also the Retailer offers, from which I have made about £50 so far. I do also use FD, but for their Regular Saver only.

atush

By all means save up a deposit to buy a home.

But as a HRTaxpayer i hope you have joined your work pension (or opened one yourself).

gallaghb

atush wrote: »

By all means save up a deposit to buy a home.

But as a HRTaxpayer i hope you have joined your work pension (or opened one yourself).

Thanks, I am in my workplace pension and will be increasing my contributions as soon as I am debt free.

gallaghb

Archi_Bald wrote: »

You don't have to move your current account as you can have as many of them as you want / as you get accepted for. I still have over 20 myself though some are just sitting there with zero balances, waiting for the next round of switching offers.

If you are in credit, the Santander 123 undoubtedly offers better value for money than an FD current account does. Apart from the potential for interest, the pays 100% more cashback than the FD. I make around £10/mth in cashback. There are also the Retailer offers, from which I have made about £50 so far. I do also use FD, but for their Regular Saver only.

But for Santander you do need to have direct debits going out of it right? Maybe I'll just bite the bullet and switch. I just quite the value the service I get at FD.
To take advantage of the FD reg saver I assume you just need to have the 1st account and they're happy if there's no DDs going out or salary being paid in?

Thrugelmir

gallaghb wrote: »

Yes saving for a mortgage

Then there's also Nationwides save to buy scheme to consider which provides brownie points as well.