Exhausted all options? Where to save my money?

MoneyMan01

I imagine it would of been in the beginning, but this states Apr 19 - Apr 20. With Nationwide. The fact it showed me receiving circa £740 on my £60,000 Cash ISA I guess it's best I leave that alone?

Also, I had a look about transfering my Help to Buy ISA into a Lifetime ISA (which can be used for a £450k property as opposed to £250k for HTB), but from what I understand, Lifetime ISA's only allow £4k in a tax year, but my understanding is that when transfering an ISA you have to do the full amount? As I have nearly £11k in there, how would that work if the limit on the lifetime ISA is £4k? Am I still able to transfer the full £11k across?

steampowered

TheDarkKnight93 said:

Anything that someone can recommend based on the info I provided in my opening post? 

It is difficult to advise, because your timescales are not 100% clear. 

£60k is a very good deposit - at least, outside of London. Isn't that enough? With your first property it is normal to make compromises - which could mean living in a cheaper area or a small property. You can always move in a few years time!

If you are looking to buy within the next 2 - 3 years, I would suggest you keep the money in savings accounts, making the most of your Lifetime ISA allowance and regular savers. That won't get you much of a return but the money will be safe.

If you think it might take more than 2 - 3 years, I personally would invest in stocks and shares. Over a 2 - 3 period there is a risk that the value of your investment might go down. If you invest in a global stock market tracker, per the link I posted, the risk of that happening over a 2-3 year period is about 20%. Some people will not be comfortable taking that risk but as a 27 year old with very low living costs, you are in a perfect position to take a sensible level of risk to get sensible returns. The 80% chance of making a decent return seems worth the 20% chance of making a loss.

As you are living with your parents, I do think you should consider renting for a bit. You learn a lot about the housing market and your personal property preferences from living independently. Renting for a year would reduce the chance of making an bad purchase.

MoneyMan01

Would I be able to transfer my Cash ISA (£60k) into a Lifetime ISA? (That has a 1% interest rate).

Or would I be able to transfer my Help to Buy (around £11k) into a Lifetime ISA?

It states that you can put a maximum of £4k a year into a Lifetime ISA, however I thought when you transfer an ISA, you have to do the full amount? So how would that work?

If I move my money out of my Cash ISA to somewhere that isn't an ISA, will I receive any penalty's/fee's?

83705628

TheDarkKnight93 said:

lhsecons said:

You could put the £60000 into NS&I. This currently pays 1.16%. Not a fortune but better than 0.05%. By the look of what you have, you would still be willow below the taxable limit for interest.
It may be worth drop feeding into other regular savers eg M&S, Lloyds Coventry Building Society.
Otherwise you are looking at stocks and share ISA.

If I move my money out of my Cash ISA, will I receive any penalty's/fee's?

/
You'd have to ask the bank/company you have the cash ISA with

grumiofoundation

TheDarkKnight93 said:

Would I be able to transfer my Cash ISA (£60k) into a Lifetime ISA? (That has a 1% interest rate).

Or would I be able to transfer my Help to Buy (around £11k) into a Lifetime ISA?

It states that you can put a maximum of £4k a year into a Lifetime ISA, however I thought when you transfer an ISA, you have to do the full amount? So how would that work?

If I move my money out of my Cash ISA to somewhere that isn't an ISA, will I receive any penalty's/fee's?

Lifetime ISA is limited to £4000 per year (tax year) whether transfer or not.

Assuming cash ISA is not a fixed term won’t be any penalty to transfer. 

You can have, and pay into, both HTB isa and lifetime ISA.

MoneyMan01

But I thought when transferring an ISA, it had to be the full amount?

So, if it is the HTB (£11k) or the Cash ISA (£60k), if I was to transfer to a Lifetime ISA, only £4k could be moved across from either?

Like I say, I thought it had to be the full amount so it's not exactly clear.

grumiofoundation

TheDarkKnight93 said:

But I thought when transferring an ISA, it had to be the full amount?

So, if it is the HTB (£11k) or the Cash ISA (£60k), if I was to transfer to a Lifetime ISA, only £4k could be moved across from either?

Like I say, I thought it had to be the full amount so it's not exactly clear.

Previous years ISA subscriptions can be transferred partially (if provider allows I believe). Current years subscriptions must be kept together. 

If you still have £4000 allowance left, you can just pay into the lifetime ISA ‘Normally’ rather than by transfer. 

MoneyMan01

Also, now that I discovered it saying around £700 a year interest on my Cash ISA, I don't know whether that is correct (I presume it must be?) and to just leave it there making around 1.2%-ish annualy? I'm cautious of asking the bank now in case it is a mistake and they decide to lower the interest %!

I'm probably reading it wrong but I don't see how I am when it says Tax year: April 2019 - April 2020: The interest and tax amount is shown below. This only covers the last completed tax year: £740 total gross interest / £0 tax deducted / £740 total net interest.

Confused!

MoneyMan01

grumiofoundation said:

TheDarkKnight93 said:

But I thought when transferring an ISA, it had to be the full amount?

So, if it is the HTB (£11k) or the Cash ISA (£60k), if I was to transfer to a Lifetime ISA, only £4k could be moved across from either?

Like I say, I thought it had to be the full amount so it's not exactly clear.

Previous years ISA subscriptions can be transferred partially (if provider allows I believe). Current years subscriptions must be kept together. 

If you still have £4000 allowance left, you can just pay into the lifetime ISA ‘Normally’ rather than by transfer. 

Ah I see. Thing is I definitely do want to buy a house, and given the Lifetime ISA allows for up to £450k house price, it makes sense I use the Lifetime ISA as the "bonus". Are you saying the only way I can get my Help to Buy ISA over to the Lifetime ISA (to allow for the £450k house price), is to transfer £4,000 now, £4,000 in April 2021 and then the remaining £4,000 in 2022?

Not sure that's a great option for me, as by that time I'm 3 years down the line with the same bonus (£3k), as I am at in about 5 months (current HTB ISA is a few £ short of £11k).

Obviously the tricky situation there is I can't pay any more into the HTB as the max bonus is £3k anyway.

So having the Lifetime ISA now does make sense but I can't see a way of me getting my money into that from the HTB with it making any sense. Obviously April 2023 I can put an extra £4k and then it starts making sense, but it will take 3 years for me to get there. Seems a waste of 3 years for that money after it's taken me so long to nearly complete the full bonus amount on the HTB.

Unless I'm understanding it wrong?

grumiofoundation

You can keep HTB and open and pay into LISA, don’t need to withdraw money from HTB ISA? 

I believe you can continue to pay into HTB ISA (if decent rate) and have above £12,000 in, just that bonus is capped (may vary by provider?). 

You will be able to have paid £12000 into LISA (can just pay out of your non-HTB money) by April 2022 - so if you are planning to buy before then HTB ISA may be better (although if the £250000 limit will be a problem the any LISA bonus is better than none).