Savings advice for 29yo with £29k

charlottesaves

Hi Money Saving Experts, 
This is my first post, as I'm a bit lost as to where my money will be best invested. 
I'm 29 and am looking to buy a flat in London with a partner in the next few years. 

• I have 12k in NatWest Help to Buy ISA earning 1.98% tax free and 2.00%AER. 

• My remaining 17k is in a Natwest Savings account with 0.61% Gross and 0.61%AER. As I've been working over the pandemic I've been able to save considerably more and will be hoping to bank 1k of my monthly salary into a savings account going forward. 
• I also have a day-to-day account with Natwest, in which I move money over to Monzo ad hoc to keep better track of my day-to-day spending

• My partner has 2k in a LISA Account. 

My challenge is that there are very few properties in London which would fit under the 450k cap required for Help to Buy ISA, so while I desperately want to use this bonus, I now need to think of the best save/invest this money as 0.61% vs 2.00% interest is a big difference. 
Really appreciate any advice anyone has. 
Thanks, 
Charlotte

Riff_Raff

A few thoughts:
1. Stick with the HTB ISA, even if you end up not being able to claim the bonus, as long as the interest rate stays favourable.
2. Move your Natwest savings to an account with a competitive rate:
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
3. It may not make sense for you to open your own LISA right now, since you have £12k in a HTBISA and can only transfer £4k per year into a LISA, and you are having doubts about being able to claim a bonus anyway, but keep it in mind as your plans develop. If you decide not to buy for a few years, you could potentially get a bigger bonus from a LISA.
4. I would not invest at all if you think you might be buying a house within 5 years due to the risk. Focus on saving and maximising interest, however small/dull it might seem.

I'm in a somewhat similar situation to you, except I'm specifically trying to escape London and similarly overpriced areas.

epm-84

If you're not sure when you'll buy a home or expect it to be soon then move the £17k to the NS&I Income Bond, which is a savings account offering 1.16% interest but one where the interest is paid to your current account opposed to added to your savings account.  You can only add further deposits of £500 or more but as you plan to pay in £1000 a month, that won't be a problem and you can also transfer your interest back to the NS&I account at the same time as your salary, if you want.

If you know it's definitely a number of years off then you could look at putting some money in a fixed rate account to get slightly more interest.  If you can find something suitable through the Raisin marketplace you can get a welcome bonus, if you've not previously used Raisin, which you won't get from going direct to the provider: https://www.raisin.co.uk/bonus/

Albermarle

Sorry to add a rather negative note but the reality is that your current level of savings ( partner only has £2K ?) are a very long way from a decent deposit on a London flat . If you can only find the minimum deposit , you pay higher rates of interest on your mortgage. Also the cost of moving in , furniture , white goods etc will cost a few grand at least.
Rather than worrying about % rates of interest , you need somehow to generate more money as a couple to put away each month . Or move somewhere cheaper , or get the bank of Mum and Dad to help ( if they can )