Financial planning in UK - advice please

kikkime

Hello, I am looking to settle in the UK in 5 years' time and desperately need advice on how I can make the best out of my current situation.

I have opened a few saving accounts since mid-April and will continue to pay into:
-FirstDirect Regular Savers £300/month (I switched from Barclays and am kicking myself for not knowing about MSE's link which will help me earn extra £25 switch bonus)
-Barclays Help to Buy £200/month
-Chip app £100 for 6 consecutive days during first week of each calendar month + automatic saves @ 3% rate (for now)

All the above makes up for about 70% of my monthly nett income.

My fixed expenditure is:
-bills (all inclusive) +-£65
-monthly misc budget £400 (transferred £100/week into Monzo account to track and control my spending habits, with roundup amount sent into pot)
-gym DD £35
-I am also giving pocket money to a close relative studying in the UK £100/mth

I was told by Newcastle BS that unless I get Indefinite Leave to Remain status, I will not be eligible to apply for a LISA account, which I don't really understand because their website says "resident for tax purposes". But okay.

From what I understand, we can only have 1 cash ISA, 1 LISA, 1 investment ISA in a tax year. I think Help to Buy is effectively making me lose the eligibility of having another cash ISA when its function (at least to me) is similar to LISA. Please correct me if my understanding is wrong.

I'm also trying to build my extremely thin credit file.
-I hold a Barclays Forward credit card with £400 credit limit (meager, I know) and keep spending below £100 (when it does go over I pay back in almost immediately) for monthly credit statement with direct debit set up for full amount payment. Actually I just use it for reimbursable expenses. So personally, whatever I put on this card is not part of my budgeted expenses.
-I have registered to vote

Would love to hear from anyone willing to offer advice and share their experience on:
-transferring from H2B into LISA
-investment ISA
-or anything else you reckon I would fare better compared to what I'm currently doing

Ben8282

You appear to be doing very well. I don't really understand what sort of advice you actually want

gallygirl

I can't advise on a LISA - except maybe try applying with a different bank?



I shouldn't get hung up on a cash ISA. The first £1,000 of interest is tax free so for now just go for the highest rates, regardless of their tax status.



Good luck

kikkime

Ben8282 wrote: »

You appear to be doing very well. I don't really understand what sort of advice you actually want

Hi there.
The advice that I need is if there are any other better options or a smarter route saving and budgeting based on forum members' experiences.
I know I am no good with finances I need to start somewhere, it's now or never. The above first post is me doing homework and my own research before I blindly ask for help and throwing the question to everyone else, I have laid out a plan based on my findings but I am not sure if this is a good approach. I was hoping for either some assurance or any alternative suggestion.

kikkime

gallygirl wrote: »

I can't advise on a LISA - except maybe try applying with a different bank?
I shouldn't get hung up on a cash ISA. The first £1,000 of interest is tax free so for now just go for the highest rates, regardless of their tax status.
Good luck

Thank you.
I have reviewed other banks' LISA and will continue to keep tabs. As of now, perhaps I should stick to Help to Buy with the high interest. Truth be told, I cannot afford to put anymore into savings or take up any other cash ISA anyway. It appears that bonding a big sum of money for several years looks more feasible to me now, but I don't have that sum of money to stash away. When I manage to open LISA then I will transfer from H2B and then get a fixed term cash ISA.
I know I can't do much now, just trying to make sense of my timeline so I will be more aware of what I should do when I hit certain time period/target.

badger09

I think you're doing very well.

As a new home for some of your £5k, have a look at Nationwide FlexDirect. Current account paying 5% on £2500 for a year. You could also open a BoS Vantage for the balance.

Forget about cash ISAs, apart from HTB as the rates can be beaten by other savings accounts, and you can earn £1k interest, tax free.

You might also consider Virgin Money Regular Savers - they currently have a store issue 16, paying 3% on £250 per month. The advantage is that they are flexible, so you can pay in between £1 & £250 per month, but also withdraw money if you need it.

Good luck.

kikkime

badger09 wrote: »

As a new home for some of your £5k, have a look at Nationwide FlexDirect. Current account paying 5% on £2500 for a year. You could also open a BoS Vantage for the balance.

Okay it seems easier to do Nationwide FlexDirect and earn £125 at the end of 12 months provided I keep the balance above £2500 at any given time. Also I'd be able to get a £100 switch bonus if I get a referral from an existing user (still searching tho).

I previously misunderstood that BoS Vantage pays in monthly, but seeing that it's annual, I think I'll pass for now.

badger09 wrote: »

Forget about cash ISAs, apart from HTB as the rates can be beaten by other savings accounts, and you can earn £1k interest, tax free.

You might also consider Virgin Money Regular Savers - they currently have a store issue 16, paying 3% on £250 per month. The advantage is that they are flexible, so you can pay in between £1 & £250 per month, but also withdraw money if you need it.

Good luck.

Thank you.
I've read up on Virgin Money Regular Savers as you mention it, it appears that I can't manage the money online, which is quite a turn off. It's good that I don't need a current account with them to have the regular savers account though, will keep it on my watch list.

colsten

kikkime wrote: »

Okay it seems easier to do Nationwide FlexDirect and earn £125 at the end of 12 months provided I keep the balance above £2500 at any given time. Also I'd be able to get a £100 switch bonus if I get a referral from an existing user (still searching tho).

Keeping more than £2,500 in the FlexDirect serves no purpose as you only get interest on £2,500 provided you pay in £1,000 each month. You can take the £1,000 and the interest out as soon as they have hit the account. Keep your balance at £2,500.

To get a referral, check out the MSE referral board.

colsten

kikkime wrote: »

I previously misunderstood that BoS Vantage pays in monthly, but seeing that it's annual, I think I'll pass for now.

Not sure what you mean by that. BoS Vantage pays interest monthly, on up to £5,000, provided you pay in £1,000 a month. But it's only 1.5% AER.

kikkime

colsten wrote: »

Keeping more than £2,500 in the FlexDirect serves no purpose as you only get interest on £2,500 provided you pay in £1,000 each month. You can take the £1,000 and the interest out as soon as they have hit the account. Keep your balance at £2,500.

To get a referral, check out the MSE referral board.

Indeed I can transfer out anything >£2500 as soon as the monthly £1000 gets in each month. Thanks for the tip!

colsten wrote: »

Not sure what you mean by that. BoS Vantage pays interest monthly, on up to £5,000, provided you pay in £1,000 a month. But it's only 1.5% AER.

I meant that I misunderstood that 1.5% of £5000 will be paid every month, instead of by the end of the year you will get a total of 1.5% of £5000. Quite stupid of me to think it's that easy in the first place.

Emily_Joy

kikkime wrote: »

I was told by Nationwide BS that unless I get Indefinite Leave to Remain status, I will not be eligible to apply for a LISA account, which I don't really understand because their website says "resident for tax purposes".

I am not quite certain why you are talking about Nationwide LISA, as it doesn't exist. LISAs = Life Time ISAs where you can pay up to £4000 a year and get a government bonus of 25% of what you've paid are provided by Skipton Building Society and the Nottingham Building Society, none of which require you to have an indefinite leave to remain to open the account. I suggest you open it as soon as you can as you become eligible for a bonus if you are to withdraw funds for the purpose of buying the property one year after account opening.