Savings scenario

Garydear300

Good evening to you all!

My wife and I are about to embark on our journey towards owning our first house. It’s been a long time coming, we have 3 youngish children and we are both at the beginnings of new careers. So, what we would be hugely grateful for, is some advice..

OUR SITUATION

We moved out of our 3rd privately rented property earlier this year after taking up the very kind offer from my in laws of moving into their home to save. We have paid off all the outstanding debts and now are looking at what is the best way forward in terms of savings. We have agreed that we want to be moving out within 12 months from now and have worked out we can save around £3300 each month. With the property costs of houses we’re looking at being around the £350000 mark, we feel this is achievable. We have 3 children aged between 7 and 12.

From what I can see, the help to buy isa is no good to us due to the house price we’re looking at. Would the LISA be more ideal? We are currently with the CO OP bank and our credit rating is fair but no better at the moment. I’m hoping that the 12 months ahead will sort that out!.

Any advice would be much appreciated. I’m a little scared about investments and, if I’m honest, I just want a safe savings account that I can add to every month..

Thank you in advance!

ewaste

With a short time frame investments are essentially off the table therefore it's multiple current accounts with associated regular savings accounts to try and eek out a few hundred pounds of interest over the next 12 months. However even this may or may not be worth your time if it's a hassle to meet the requirements for moving money around and multiple direct debits.

Opening a Cash LISA each would seem a sensible move, keeping in mind it needs to be open a full 12 months so if you find a house you like before then it's problematic.

I would open the Cash LISA's and a joint current account like a Santander 1-2-3 and move money monthly into the Santander account, and attached regular saver, which would keep your savings separate from your main current accounts.

Alexland

Welcome to the forum.

Yes it makes sense to each open Skipton cash LISA and contribute £4k each this tax year and £4k each at the start of next tax year so in a year's time you could have contributed £16k and have received £4k of bonuses so a total of £20k. The accounts need to have been open 12 months before buying a property as first time buyers.

Worth opening individual Nationwide Flex Direct accounts which let you keep a £2.5k balance at 5% for 12 months interest paid monthly.

Also if you recommend each other to switch from Coop to Nationwide that's £100 each per switch (so £400 bonus total - we just did this). Also if you have enough spare cash then also open a Joint Flex Direct account to store another £2.5k at 5% for a year.

Then as Nationwide customers you will each have access to their 5% regular savers where you can deposit up to £250 per month at 5%.

If you need more 5% regular saves then open bank accounts with HSBC (£250 per month they will also pay £200 each for switching if you have a spare bank account - we just did this) or Santander 123 (£200 per month but no switching bonus and small fee so if you do this use a joint account and 2 regular savers).

Finally don't forget to save enough to cover legal costs, stamp duty, etc. And don't forget to read the small print to ensure the accounts are suitable and you get the desired results.

Good luck!

Alex

Garydear300

Much appreciated guys. Great idea about the recommending a friend too! Opened the ISA today so will look into the others. Nice to be saving for a change!

Alexland

Remember you can both open LISAs