Lump sum investment advice

TheHamster

Hi, here's my situation:

No savings.
No debt that has interest on it.
Minimal ability to save monthly.
Able to live on what I earn (not going further into debt or needing to spend any lump sums in the foreseeable future).
No mortgage and have never owned a home.

I am about to inherit an amount which will be between £10,000 and £20,000. I would like to put it on one side so that it can be used towards a deposit for a house. I don't expect to buy it in less than a year, so I plan to put £4000 into a LISA. Can anyone advise:

Can I put £4000 into a LISA all at once, and then not pay in any more until 12 months later? Or do I need to stagger the deposits?

I'm thinking a cash ISA for the rest of the money, but if I put it all in at once will I be taxed? I have never been able to save into an actual savings account before, so I don't know how that works.

Any general advice on what is best to do with this amount of money all at once, with an intention to withdraw it all within the next few years to use as a deposit on a house? I think it is too short term for me to want any investments; I want it to dependably, if slowly, increase and hopefully it won't be in there long enough to ride out any bumps.

Also, anyone with any info about ethical ways of doing this investing? I'm using Ethical Consumer for some info, but they don't seem to have anything on LISAs for example - I think maybe none of the really ethical banks etc. offer them but I'm not sure.

Thanks.

jimjames

I can't answer for the LISA but the cash ISA will have no impact tax wise. You do need to think whether a cash ISA is the best option though as you're likely to get better rates outside an ISA and if it's being spent on a house deposit then long term benefit is negligible.

Zorillo

You could put £4k in a LISA this side of April 5th, another £4k in on or after April 6th, and then another £4k after the following April 6th and every April thereafter. So within just over 14 months you could have £12k deposited and £3k added as government bonus.

xylophone

You might contribute £4000 to the LISA before 6 April and hold the balance at the best interest rate you can get, contributing the next £4000 in late March 2020.

Have you ever had a Nationwide Flexdirect current account or a TSB Classic Plus current account?

You might open both, set TSB to paperless, deposit £2500 in NW and £1500 in TSB - you would then set up a matching same day mid month standing order for £1000 from TSB to NW and from NW to TSB.



You would withdraw the monthly interest from both accounts and deposit in your savings account.

You could also set up a Flex Regular saver with NW.

The 5% interest rate on the NW ends after a year but you could use the bulk of the money in the account for your LISA contribution.

Savings Rates here

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

TheHamster

Thanks all for the advice, that's super useful . I hadn't thought of the tax year thing, I was thinking calendar year like an idiot. I will definitely try and do that although I don't have access to the funds yet and may miss the 6th April deadline this year. I'll look into the bank account deals as well. Really helpful, cheers!