xxx

happythom_316

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colsten

Unless you don't expect to be buying in the next 7-10 years, you shouldn't think about investing. It's saving what you want if you want to buy in the short or medium term.

Multiplying your savings is nigh on impossible in the next few decades, even if you were prepared to risk your entire capital - are you?

SO:

1. what are your timescales
2. what is your risk appetite, on a scale from 0 - 10 (0 - can't afford to lose a penny, 10 - don't mind if all is lost)

eskbanker

colsten wrote: »

Multiplying your savings is nigh on impossible in the next few decades

Multiplying by 1.015 (or even 1.02) per year is doable!

colsten

eskbanker wrote: »

Multiplying by 1.015 (or even 1.02) per year is doable!

:rotfl: valid point

pip895

Think again on a LISA it really is the best deal for you. 25% uplift really isn’t to be missed. Just keep back some cash to reduce the chance of needing to withdraw early.

You can get S&S LISAs to but if you invest you need to be prepared to delay when you can buy by a few years if the stock market falls. This isn’t always easy to do at the point you think you have saved enough and the right property comes up! My generation is littered with people who have impoverished there retirement by avoiding investments their whole lives because of a bad investment decision made in their twenties.

Alexland

happythom_316 wrote: »

I don't want to proceed with them as LISA is quite restrictive and penalties high if I want to withdraw money for an emergency

It's worth reconsidering the LISA (even if you keep your emergency money elsewhere) as the penalty is mostly the bonus with only a 6.25% loss against the original contribution. For example if you added £4,000, received a £1,000 bonus to bring the account to £5,000 and then did a full withdrawal your 25% penalty would be £1,250 leaving you with £3,750.

In the event of a partial withdrawal the penalty might be less than the bonus you received on the whole contribution. For example if you withdrew £2,000 the penalty would only be £500.

Still it would be a problem if you were looking to buy a non-qualifying property.

Alex

jimjames

If you want a cautionary tale about what not to do with your house deposit money you might want to read this

https://forums.moneysavingexpert.com/discussion/5346049/london-capital-and-finance

No idea if the guy went ahead but if he did then 1) he has probably lost 75% of his money 2) has no idea when he will receive the remaining 25%.

It's an extreme example but shows why you shouldn't risk deposits for property you want to buy in the near future.

happythom_316

Alexland wrote: »

It's worth reconsidering the LISA (even if you keep your emergency money elsewhere) as the penalty is mostly the bonus with only a 6.25% loss against the original contribution. For example if you added £4,000, received a £1,000 bonus to bring the account to £5,000 and then did a full withdrawal your 25% penalty would be £1,250 leaving you with £3,750.

In the event of a partial withdrawal the penalty might be less than the bonus you received on the whole contribution. For example if you withdrew £2,000 the penalty would only be £500.

Still it would be a problem if you were looking to buy a non-qualifying property.

Alex

Hi Alex,
I appreciate your comment on this.
As per what you and other have said I think I should proceed with LISA then.

But what do you mean when you say "it would be a problem if you were looking to buy a non-qualifying property".
Is there any enforcing requirement in regards to the type of property when using a LISA deposit?

colsten

happythom_316 wrote: »

Is there any enforcing requirement in regards to the type of property when using a LISA deposit?

The home you buy must:

be in the UK
have a price of £450,000 or less
be the only home you will own
be where you intend to live
be purchased with a mortgage

happythom_316

pip895 wrote: »

Think again on a LISA it really is the best deal for you. 25% uplift really isn’t to be missed. Just keep back some cash to reduce the chance of needing to withdraw early.

You can get S&S LISAs to but if you invest you need to be prepared to delay when you can buy by a few years if the stock market falls. This isn’t always easy to do at the point you think you have saved enough and the right property comes up! My generation is littered with people who have impoverished there retirement by avoiding investments their whole lives because of a bad investment decision made in their twenties.

Alexland wrote: »

It's worth reconsidering the LISA (even if you keep your emergency money elsewhere) as the penalty is mostly the bonus with only a 6.25% loss against the original contribution. For example if you added £4,000, received a £1,000 bonus to bring the account to £5,000 and then did a full withdrawal your 25% penalty would be £1,250 leaving you with £3,750.

In the event of a partial withdrawal the penalty might be less than the bonus you received on the whole contribution. For example if you withdrew £2,000 the penalty would only be £500.

Still it would be a problem if you were looking to buy a non-qualifying property.

Alex

colsten wrote: »

The home you buy must:

be in the UK
have a price of £450,000 or less
be the only home you will own
be where you intend to live
be purchased with a mortgage

Thanks all,

I appreciate your help on this.

What would be the best bank to open a LISA account?

MaxZorin

Moneybox’s Cash LISA paying 1.4% is probably your best bet if you’re planning to use it for a house purchase. Stocks and Shares LISAs are a better bet for retirement but risky if you’re planning to purchase a house in the next few years as a stock market crash could wipe out some of its value.

https://www.moneyboxapp.com/cash-lifetime-isa/