Buying Within The Next Year - Maximising savings

PeteJL

Hi all, not sure if this belongs here or in the House Buying forum. 

But my query. I'm saving to buy a house with my partner (I'm a first timer, he isn't), and I've had a fixed savings account come to an end. We will be buying within the next eight months or thereabouts so I haven't reinvested in another fixed term savings account. Don't have a LISA or Help To Buy (saving for a house wasn't a goal until my other half moved jobs last year), so have put a chunk of my savings into an easy access savings account. Is that the best way to go or is there something better I could be doing with my money? Our finances are currently separate, I've saved up about £22k & his is around the same mark, slightly higher. 

MaxiRobriguez

Other option is premium bonds, but for the sake of 8 months you're not going to radically improve on your current £22k via interest alone.

Is your partner selling his other property? If not, careful about additional stamp duty if you are purchasing together.

steampowered

Could it be worth putting opening a Lifetime ISA? If you qualify, you can put in £4,000 now - and you will get a £1,000 bonus from the government. You could put in another £4,000 in the next tax year (which starts in April 2021) and you'll get a second £1,000 bonus.

That's going to be much better than any interest you could get on a savings account !

Have a look at the "best buys" on the savings section on MSE, but realistically you are not going to find anything much better than 1%. On a £22k balance over 8 months that would get you interest of about £146.

eskbanker

steampowered said:

Could it be worth putting opening a Lifetime ISA?

Not if "buying within the next eight months or thereabouts", which sounds too specific to be able to countenance waiting over a year.... 

grumiofoundation

8 months could easily end up as 12+ months, unless the 8 months is set in stone might as well open with £1 today and if this timescale changes have already started the 12-month 'clock'. 

niblike

If we put in 4K and buy a house after 1 year, does that mean we only get a 1K bonus? I.e. if we continue contributing to the LISA, we'll continue getting a 1K/year bonus, but can't use it towards the house like a mortgage? 

grumiofoundation

niblike said:

If we put in 4K and buy a house after 1 year, does that mean we only get a 1K bonus? I.e. if we continue contributing to the LISA, we'll continue getting a 1K/year bonus, but can't use it towards the house like a mortgage? 

Over one (calendar) year you most likely will be able get 2 bonuses - as £4000 contribution limit is based on tax years.

Once you have use LISA to purchase a house you cannot then withdraw penalty free retirement. If using for retirement a stocks and shares ISA is more suitable. 

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