What is the best investment option for Uni Student?

md258

I personally wouldn't invest at all until her future is more certain. A LISA for a house purchase is also not necessarily the right option now as when she finishes uni, she will need cash for rent deposit, car (?) and other bits around her first job/moving out. Or possibly savings while she does further study abroad.  When she goes into the workplace, depending on her salary and how much is saved, she may be looking to buy in 2 years or 15. If it is > 10 years, then investing (S&S LISA) could be a good option, if < 5 years then a cash LISA is probably the best option.

If any of the answers to these unknowns are known or (un)likely, then that may sway the strategy.

PS.  I already owned a flat in an expensive area when I met my wife. If her savings had been in a LISA then we would have had to pay thw penalty to access them for our house purchase together as it was over £450k. I'm not saying the LISA is the wrong option, just another point to consider.

csgohan4

OP there is no best fund to invest in, You must take care in choosing a fund if your going down this route and don't get confused with the hundreds of funds available
https://monevator.com/category/investing/passive-investing-investing/

You need to do some reading and understand the theory on investing in S+S and not just choose today's highest winner, because it could be tomorrow's loser. Go for something with a proven track record, a cheap global index tracker

However as I pointed out earlier, with that amount of money, it maybe prudent to use as an emergency fund/ career cost, rather than investing for the sake of. I only started investing in the late on because before then, I didn't much spare cash to invest. If I had invested early on, I would be poorer for it.  

Albermarle

Can she invest that £5k held in LISA in HL;s Master porfolio? Any extra charges for that?

If she does go down this route then probably worth clarifying this point .

HL charge a platform fee of 0.45% - then each fund you buy have their own fees . Presumably the ten or so funds suggested in the master portfolio all have different fees . However as they all charge a % you do not get penalised for having multiple funds, and you do get charged for buying or selling them . Seems a bit complicated for a small investor though.

northernerinmidlands

Good idea for him to start a lifetime isa but consider a smaller amount to begin with. His main savings should be easier to access  for emergency use .Start his isa with the minimum regular monthly savings amount possibly into a cheap global tracker. At the end of the tax year he can decide how much he wants to commit to the Lisa from his savings  for this year. 

mazibee

Albermarle said:

Can she invest that £5k held in LISA in HL;s Master porfolio? Any extra charges for that?

If she does go down this route then probably worth clarifying this point .

HL charge a platform fee of 0.45% - then each fund you buy have their own fees . Presumably the ten or so funds suggested in the master portfolio all have different fees . However as they all charge a % you do not get penalised for having multiple funds, and you do get charged for buying or selling them . Seems a bit complicated for a small investor though.

Thanks for the reply , I thought she has to pay HL  0.45% fee but she has also to payadditional fee to the different funds in Master potfolios , thanks for clarifying, I wantt o dig more and will ring them tomorrow.

northernerinmidlands said:

Good idea for him to start a lifetime isa but consider a smaller amount to begin with. His main savings should be easier to access  for emergency use .Start his isa with the minimum regular monthly savings amount possibly into a cheap global tracker. At the end of the tax year he can decide how much he wants to commit to the Lisa from his savings  for this year. 

At the moment she is banking with HSBC , any idea idea which saving account gives good return for holding her money?

I am am still a bit confused between Cash LISA and S&S LISA.

How much interest is paid on Cash LISA?

If she opens S&S LISA and buys sells FUNDS/SHARES,  and can she transfer the maoney back in cash LISA,

Albermarle

Cash Lisa pays about 1 % interest . MSE recommends Nottingham building society or Moneybox.
OK to transfer between S&S and cash LISA's .
I notice A J Bell offer S&S LISA with a charge of only 0.25% ( cheaper competitor to HL) 
https://www.youinvest.co.uk/lifetime-isa
Savings accounts here >>https://moneyfacts.co.uk/savings-accounts/

northernerinmidlands

Interest rates seem to be dropping regularly atm and likely to continue sadly.
   My daughter has a LISA with Nottingham Building Society this year paying around 1%.
   She had a LISA with Hl previously and paid around £1.20 on average fees monthly by debit card. Made around 9% while holding it though.
   HL also have active savings which give you access a limited range of bank products which you can use for cash savings without swapping banks.
    Good luck with whatever he decides.

northernerinmidlands

*she sorry

grumiofoundation

northernerinmidlands said:

Interest rates seem to be dropping regularly atm and likely to continue sadly.
   My daughter has a LISA with Nottingham Building Society this year paying around 1%.
   She had a LISA with Hl previously and paid around £1.20 on average fees monthly by debit card. Made around 9% while holding it though.
   HL also have active savings which give you access a limited range of bank products which you can use for cash savings without swapping banks.
    Good luck with whatever he decides.

Don’t believe HL active savings can be used for LISA. 

As an aside - the returns made in the lifetime ISA were not as a result of the provider but a result of the investments chosen.  

mazibee

grumiofoundation said:

northernerinmidlands said:

Interest rates seem to be dropping regularly atm and likely to continue sadly.
   My daughter has a LISA with Nottingham Building Society this year paying around 1%.
   She had a LISA with Hl previously and paid around £1.20 on average fees monthly by debit card. Made around 9% while holding it though.
   HL also have active savings which give you access a limited range of bank products which you can use for cash savings without swapping banks.
    Good luck with whatever he decides.

Don’t believe HL active savings can be used for LISA. 

As an aside - the returns made in the lifetime ISA were not as a result of the provider but a result of the investments chosen.  

northernerinmidlands said:

Interest rates seem to be dropping regularly atm and likely to continue sadly.
   My daughter has a LISA with Nottingham Building Society this year paying around 1%.
   She had a LISA with Hl previously and paid around £1.20 on average fees monthly by debit card. Made around 9% while holding it though.
   HL also have active savings which give you access a limited range of bank products which you can use for cash savings without swapping banks.
    Good luck with whatever he decides.

Please can you explain how your DD made a return of 9% while holding. ( She account she held the money in and for how long)
It cannot be the saving acocunt? Was it a Cash LISA or S&S LISA, and which one, if you dont mind sharing?