Help with savings - Goal to buy first property

Bringvaluetome

Hi All,
Looking for advice on where to put my savings.
My long term goal is to buy my first property - at around 3/4 years from now.
Looking to close HTB ISA and transfer it to a Lifetime ISA how unsure which one.
Credit card is interest free until April 2021 and will balance transfer it then.

CURRENT ASSETS            

HELP TO BUY ISA  £2,012

HL ISA   £1,400

CASH SAVED IN BANK   £315

TOTAL   £3,727

 LOAN TO FRIEND - LEFT TO PAY AS OF 28/05/2020             £1,750

 TOTAL   £5,477

 LIABILITY            

CREDIT CARD     £4,513

 TOTAL   £4,513

TOTAL DEBT        £0

NET WORTH JUNE 2020 £964

OTHER ASSETS 

HL SIPP - PENSION           £59

AVIVA WORK PENSION £1,950

TOTAL   £1,947

Open to any questions.
Thanks in advance!

eskbanker

Bringvaluetome said:

Credit card is interest free until April 2021 and will balance transfer it then.

This implies that you feel you'll be able to shift it to another 0% deal, what makes you believe that?  What are your plans to actually repay that debt?

Bringvaluetome

eskbanker said:

Bringvaluetome said:

Credit card is interest free until April 2021 and will balance transfer it then.

This implies that you feel you'll be able to shift it to another 0% deal, what makes you believe that?  What are your plans to actually repay that debt?

In relation to the CC debt, the plan is to pay the minimum payment and accumulate cash. Rather than throw large chunks at it. By April 2021 it should be around £3500 and should be able to balance transfer it. Even if it cost's me a few £££ to tranfser, I'd then have a surplus of cash. 

eskbanker

Bringvaluetome said:

eskbanker said:

Bringvaluetome said:

Credit card is interest free until April 2021 and will balance transfer it then.

This implies that you feel you'll be able to shift it to another 0% deal, what makes you believe that?  What are your plans to actually repay that debt?

In relation to the CC debt, the plan is to pay the minimum payment and accumulate cash. Rather than throw large chunks at it. By April 2021 it should be around £3500 and should be able to balance transfer it. Even if it cost's me a few £££ to tranfser, I'd then have a surplus of cash. 

You may be right that you'd get another 0% offer but my point was that if you're making a financial plan leading up to buying your first property, you need to figure out at what point you'll be repaying your debt, that's currently equal to 80% of your savings.  Paying off £100 a month will obviously help but even at 0% it would take you until 2024 to clear it, but this leads on to something that's missing from your analysis, i.e. what your monthly surplus is, that can either be saved or put towards debt repayment.

Going back to your question about where to save, maximising what you get into a LISA makes sense, so try to ensure you fill its annual £4K allowance, by shifting your HTB money in there, and preferably anything currently invested in HL (risky to invest deposit money needed within a few years).

https://www.moneysavingexpert.com/savings/lifetime-isas/#bestbuys summarises best buy cash LISAs but rates are still coming down, e.g. https://forums.moneysavingexpert.com/discussion/6150916/moneybox-cash-lisa-interest-rate-drop-8th-of-june-2020

Bringvaluetome

Esk - thanks for your replies. Don't currently have a plan when to repay the debt, was just going to continue paying the minimum. At present I can save £900-£1000 a month and that will be up until November / December this year. After that due to change in circumstances, unsure how much I'll be able to save after that. 
So I can potentially put £3727 in to a Lifetime ISA in one chuck? (£2012 + £1400 + £315)
Possibly looking at Hargraves Lansdown LISA.

eskbanker

Bringvaluetome said:

Esk - thanks for your replies. Don't currently have a plan when to repay the debt, was just going to continue paying the minimum. At present I can save £900-£1000 a month and that will be up until November / December this year. After that due to change in circumstances, unsure how much I'll be able to save after that. 
So I can potentially put £3727 in to a Lifetime ISA in one chuck? (£2012 + £1400 + £315)
Possibly looking at Hargraves Lansdown LISA.

Yes, you can pay up to £4K into a LISA in one go, it's an annual limit not a monthly one like HTB.  However, I'd reiterate that steering clear of investment would be prudent for property deposit saving, so sticking to cash products is safer when looking to buy within a few years.

Bringvaluetome

I was getting confused about the differences between HTB & LISA. 
I want one that I can use for a initial deposit for a house. 

eskbanker

Bringvaluetome said:

I was getting confused about the differences between HTB & LISA. 
I want one that I can use for a initial deposit for a house. 

In terms of scheme rules and so on, you can use either a cash or a S&S LISA for a house deposit - the point I was making is that it's unwise to invest the money (rather than saving it in cash form) if you're going to need it within a few years, given the risk of capital loss.

Albermarle

https://www.moneysavingexpert.com/savings/lifetime-isas/

Bringvaluetome

So next step is to find a suitable cash LISA and come up with a plan for the debt?

grumiofoundation

Bringvaluetome said:

So next step is to find a suitable cash LISA and come up with a plan for the debt?

Obviously something to consider with a LISA is the withdrawal penalty if you feel you may need to access the money  - under “normal” core circumstances this penalty means you get back less that you pay in. The withdrawal penalty has been reduced until next April From 25% to 20% (so you only lose the bonus).