Savings Advice

ravens19

Hi All,

Was hoping to get some specific advice on what to do with my savings.
My main goal is to get on the property ladder in the next couple of years.

I have about £28,000 in savings, currently all in a standard current account. I have a lifetime ISA that I opened on a whim almost 12 months ago, which only has a very small amount in it and a Stocks and Shares ISA through moneybox again with minimal amounts in it. I would love to get on the property ladder, but I’m London based and don’t think I could get a large enough mortgage at this stage to make it worth/possible buying in the really near future-but would like to try in the next couple of years.

I was interested to find out what people would suggest I do with it?

I have considered opening a help-to-buy ISA, or utilising the LISA, before the tax year ends and then putting the rest in a savings account. Or would it be worth putting money into the LISA and then opening a help-to-buy? But as I understand it, I would have to use the LISA bonus rather than the Help-to-buy as taking money from the LISA would incur a penalty.



Many thanks in advance!

Josh

eskbanker

I'd fill up the LISA with whatever's left of your £4K annual allowance for 2018/19 and then do the same again next tax year.

Investing in stocks and shares is good for genuinely surplus money that's not needed for many years but if you're trying to accumulate a property deposit within a few years then I'd steer well clear of S&S and stick to cash. Personally I'd steer clear of Moneybox anyway, gimmicky and expensive.

As you say, you can't get a 25% government bonus for a first-time property purchase from both a LISA and a HTB ISA but you can use the latter simply for straight bonusless saving, as rates tend to be better than non-HTB accounts, but the monthly contribution limit is low.

Other suggestions at http://www.moneysavingexpert.com/savings/which-saving-account

ravens19

Hi eskbanker,

Many thanks for the response-really useful.

When you use the government bonus on the LISA for purchasing a property, i'm assuming they do not keep adding the 25% bonus for retirement savings after that? And is there a max amount that you can get to use on a house purchase?

Thanks for the advice on Moneybox too-didn't look too closely at it expense of it, now just using the round up function and not adding any more!

Thanks,

Josh

eskbanker

ravens19 wrote: »

When you use the government bonus on the LISA for purchasing a property, i'm assuming they do not keep adding the 25% bonus for retirement savings after that?

You can keep a LISA open after using it for a first-time property purchase and continue to receive 25% bonuses on subsequent contributions that are intended to be kept for retirement. Or if you're still under 40 you can open a new LISA if the old one has been fully depleted and closed when buying the property, subject to not paying into two in one tax year.

ravens19 wrote: »

And is there a max amount that you can get to use on a house purchase?

No, the only limitation is the contribution allowance of £4K/year.

ravens19

Perfect-thank you for your help! Topped it up now!