Saving / Investment Advice

GGarcia01

Hey there

I am only just getting into the habit of truly saving and need some advice on the best way to store my money. From what I have read, it's good to have different 'pots' for different occasions i.e. an emergency fund, a long term fixed rate saver and an account which is more accessible. I have just turned 30 and would like to have savings towards a deposit, so my understanding is - as I live in London - a LISA is a good account to start with. Vanguard Life Strategy has been mentioned as a good fixed-rate ISA, but I don't know how safe Shares/Bonds are at the moment? If it's a bad or potentially good investment in the current climate.. Or pretty safe even, if I was to lean more towards Bonds over shares?? As for an easy access account, Al Rayan has been mentioned as having a good deal at 1.6% interest. As for a Current Account, would it be a smart move to get a Santander 123. Have my salary go into it, then drop money each month into the easy access savings??? So I get interest from the Current Account and also the easy access saver.. Or does it not work like that??
Many thanks for any suggestions

eskbanker

GGarcia01 wrote: »

Vanguard Life Strategy has been mentioned as a good fixed-rate ISA, but I don't know how safe Shares/Bonds are at the moment? If it's a bad or potentially good investment in the current climate.. Or pretty safe even, if I was to lean more towards Bonds over shares??

These comments ring alarm bells and emphasise the importance of walking before you run!

If you haven't had spare money before and are looking towards getting onto the property ladder in London, then I'd forget all about investment for now and would concentrate solely on saving, as you'll need a sizable deposit to buy in the most expensive part of the country.

A Lifetime ISA is indeed a good place to start, and options for additional savings are covered at articles such as:
https://www.moneysavingexpert.com/savings/which-saving-account/
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

It's definitely a good idea to build up an emergency fund in parallel with saving for a property deposit, if you have enough money to do both?

Santander 123 was a decent current account but its Lite version is typically seen as better value for money now, other options listed at:
https://www.moneysavingexpert.com/banking/compare-best-bank-accounts/

DrSyn

1. SAVINGS: Money is in a safe place & not at risk. You expect to at least take out what you put in.

You get them from either:-
(a) NS&I, which is a loan to the UK goverment.
(b) Bank/Building Society covered by the FSCS protection (at present up to £85K).

When savings products cannot repay you your money. The FSCS will repay you (up to £85K)

Money need within 5 years should be kept in a savings account.


2. INVESTING: Putting your money at risk where there is the potential loss of all your money. You hope to take out more than you put in, but this is not guaranteed.

Put simply, investing is a long term gamble with your money. By long term think a minimum of 10 years at least.

Vanguard Life Strategy (VLS) is an investment not savings.

Investments are not covered by the FSCS protection!




3. I suggest you concentrate on building your emergency cash fund and savings.

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

https://www.moneysavingexpert.com/savings/

https://www.moneysavingexpert.com/banking/compare-best-bank-accounts/

https://www.moneysavingexpert.com/isas/


4. Think of starting a pension

https://www.moneysavingexpert.com/pensions/


5. Once you have done those, maybe think about investing.

GGarcia01

Thanks for your advice!

With a LISA account, I understand they're protected by the FSCS. But would that also cover the 25% bonus??
If not, would it be better to go with a more well known bank, than say Money Box which offers the best interest rate in the Lisa? Many thanks again

eskbanker

GGarcia01 wrote: »

With a LISA account, I understand they're protected by the FSCS. But would that also cover the 25% bonus??

Yes, FSCS protects the balance in the account regardless of how it got there.

SonOf

With a LISA account, I understand they're protected by the FSCS. But would that also cover the 25% bonus??

It depends on what you put in the LISA. If you put direct shares, ETFs or ITs, for example, then they do not get FSCS protection.

MaxZorin

GGarcia01 wrote: »

Thanks for your advice!

With a LISA account, I understand they're protected by the FSCS. But would that also cover the 25% bonus??
If not, would it be better to go with a more well known bank, than say Money Box which offers the best interest rate in the Lisa? Many thanks again

Moneybox Cash LISA funds are actually saved with OakNorth and have full FSCS protection.

DrSyn

GGarcia01 wrote: »

Thanks for your advice!

With a LISA account, I understand they're protected by the FSCS. But would that also cover the 25% bonus??
If not, would it be better to go with a more well known bank, than say Money Box which offers the best interest rate in the Lisa? Many thanks again

Just be careful which LISA account you put your money in. Read post 3.

If it is the Cash Lifetime ISA, it is a savings product, so any money in it will have the FSCS protection up to £85k.

If it is the Stocks & Shares Lifetime ISA, it is an investment product, so will not have the FSCA protection.