Exhausted all options? Where to save my money?

MoneyMan01

So basically, I should of transferred the HTB ISA when it hit £4k into the Lifetime ISA. Damn.

Might be worth transferring over to a Lifetime ISA if anyone has a HTB around the £4k mark and aren't planning on buying within the next year.

Unfortunately I don't seem to have many options with regards to beating inflation with the £60k saved now unless I risk it by going Stocks & Shares.

Don't know what to do to be honest.

kinger101

TheDarkKnight93 said:

So basically, I should of transferred the HTB ISA when it hit £4k into the Lifetime ISA. Damn.

Might be worth transferring over to a Lifetime ISA if anyone has a HTB around the £4k mark and aren't planning on buying within the next year.

Unfortunately I don't seem to have many options with regards to beating inflation with the £60k saved now unless I risk it by going Stocks & Shares.

Don't know what to do to be honest.

It depends what you mean by inflation.
https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/june2020
CPI and CPIH are both well below 1% at the moment.

MoneyMan01

Ah I see. That seems to say it is around .8%.

Still not clear as to where I should be putting the £60k.

csgohan4

NS+I is a safe bet, but regarding S+S ISA
https://monevator.com/
Is a good resource for long term planning

stephenadarglas

EdGasketTheSecond said:

TheDarkKnight93 said:

Hi Everyone

In short, I basically want to ensure my money isn't just sitting around losing out to inflation.

 so any advice would be much appreciated. Thank you.

Gold, gold, and more gold.

I'm afraid that comment is unhelpful to the original query.

83705628

TheDarkKnight93 said:

Hi Everyone

In short, I basically want to ensure my money isn't just sitting around losing out to inflation.

First of all I'll lay out my personal situation and then further down I will say what current setup I have with money etc. to hopefully make it easier for you to advise.

I'm 27. Living with my parents. No plans to move out yet as property in my area is quite expensive, I'd still need quite a bit more money to get a mortgate on a house unless I want to live in a shed! I'm guessing that I'd be aiming to get to around £100k potentially so no idea how long in terms of years that would take at this stage). Basic rate tax payer.

I have a 10% non contributory pension with my company (they pay 10% of my salary, I don't pay anything).

I pay £200 (max amount) into a Help to Buy ISA each month (currently sitting at just shy of £11,000, so have around 5/6 months left before that reaches it's max for the bonus side of the account, says it is on 1% gross interest rate?) - Side questions here, when it gets to £12,000, would I then be able to pay unlimited lump sums in and earn 1%? Or does the 1% drop? Will I not be able to make any further contributions above the £12,000? If I can continue to make contributions will it still be capped at £200 a month and retains that 1% gross interest?

I've got around £60,000 in a cash ISA with the same building society (as I thought the only way you could pay into two ISA's in the same tax year was for it to be with the same building society, please correct me if I am wrong in saying that?). I believe, if I am reading it correctly, it is paying 0.05% gross interest rate?

Paying £250 (max amount) into HSBC 2.75% 1 year regular savings account each month.

Paying £50 (max amount) into Help to Save account each month.

Based on the above the obvious stand out issue is the fact I have £60,000 just sitting there basically making no interest. Does the fact I am still paying into a Help to Buy ISA mean I cannot transfer that CASH ISA elsewhere to try and maximise the interest on it? If I transfer the Cash ISA would I still be able to pay into my Help to Buy ISA, AND money into wherever I transferred the CASH ISA to?

If I could transfer that money, where is best for me to transfer it to and what sort of interest would I be looking at?

Side note, I did take a little look into Stocks & Shares ISA's but I couldn't find anywhere online which stated what the average % interest is a year on a Stocks & Shares ISA. I obviously know it cannot be guaranteed, and they can go down, but it's hard to commit down that path when there isn't easy accessible feedback on what % interest some people had seen, or if it went down etc. 

Looking for suggestions please.

I've asked quite a few questions throughout the above, so any advice would be much appreciated. Thank you.

/
There's no such thing as the average Interest on a stocks and shares ISA unless the provider does actually pay interest on the cash you keep in it.
The return you get depends completely on what you buy. If you buy bonds, the return is the yield to maturity less fees and defaults, probably less than the best savings account currently. If you buy stocks, it's the dividend yield plus earnings growth plus/minus the change in the pe ratio over the period. A reasonable expectation from stocks over the foreseeable future is 4-6% for global, 6-8% from the UK (apparently this opinion is a bit unpopular).

Jemsnation

I've also been wondering if I should transfer my H2B into a LISA, I have 6k in my H2B (and the interest rate is MUCH better than all savings accounts I have seen). Could I transfer 4k of that into a LISA and then continue to pay into both, and just use whichever one has the most money in it by the time I am ready to buy a house? I'm not actually fussed about saving for retirement using the LISA, If I were to open one, it would be to use it for a house so just weighing up whether it would be worth doing with 6k already in a H2B.

MoneyMan01

Jemsnation said:

I've also been wondering if I should transfer my H2B into a LISA, I have 6k in my H2B (and the interest rate is MUCH better than all savings accounts I have seen). Could I transfer 4k of that into a LISA and then continue to pay into both, and just use whichever one has the most money in it by the time I am ready to buy a house? I'm not actually fussed about saving for retirement using the LISA, If I were to open one, it would be to use it for a house so just weighing up whether it would be worth doing with 6k already in a H2B.

It's entirely down to you really but the points worth baring in mind is:

Lifetime ISA = You can use to purchase a house up to £450k to get the bonus.

Help to Buy ISA = Only £250k (£450k if in London) to get the bonus.

No point saving into both IF you aren't going to use the Lisa for pension, because if you were to take any money out you pay high penatlies for doing so.

IF you know you want to buy a house, then the Lifetime ISA is where your money should be as this allows you to purchase property up to £450k, rather than being limited to £250k outside of London.

Personally, if I was in your situation, I would be moving £4k of what is in your HTB over to the Lisa (for this tax year) when you feel is right, then the rest from next April and use the Lisa going forward.

Basically, in short, if you are 100% you don't want to use the Lisa for retirement then I would definitely say do not save into both.

Your aim, if you want to buy a house, should be to save into the Lifetime ISA, as this gives you a higher house price, but be aware of the penalties that are in place if you take the money out when not using it towards a house.

Of course, this all depends on the house price you would be looking at and if you are happy with something outside of London for less than £250k, then really it comes down to you in terms of whether it's a HTB or Lisa you save in.

Hopefully the above helps.

MoneyMan01

I'm still personally none the wiser on where or if I should move my £60k somewhere.

grumiofoundation

TheDarkKnight93 said:

I'm still personally none the wiser on where or if I should move my £60k somewhere.

What do you want the 60k to ‘do’? 

If you are currently getting 0.05% then it makes sense to move the money. 

If you want to keep it in an ISA you are looking at 0.65% as the best easy access ISA that allows transfers in.
If you aren’t going to pay tax on interest and won’t want to keep the money ISA ‘wrapped’ for investing in the future (unlikely if you are looking at buying property) then you probably don’t actually need to keep in ISA. 

if you don’t need it in an ISA you can get 1.15% in NS and I Income bonds. 

If you want to maximise your interest You can look at licking the money away and/or there are various regular savers that still pay more than this but you are limited with what you pay in (some are not accessible until  1 year as well - have to check the Ts and Cs if each product).