Savings Setup Needs Refreshed

Cptralls

Hi All, 

I have came into a small pot of money - £11k to be precise and I wanted to know what the best course of action is? I may need this £11k for a house deposit in the middle of next year but between then and now have I many options? Also below is my current setup which may need refreshed as some accounts are expiring.
All advice appreciated. 

1. Nationwide - Regular Saver matured, £0 saved here at present.
2. First Direct Regular Saver @ 2.75%, allowances maxed.
3. HSBC Regular Saver @ 2.75%, allowances maxed.
4. M&S Regular Saver @ 2.75%, allowances maxed.
5. Coventry Regular Saver @ 1.75%, allowances maxed. 
6. TSB Regular @ 2%, allowances maxed. 
7. TSB Current account @ 1% - £1500
8. Premium Bonds - £7k.
9. Raisin Savings @2%, £10k, expires in January 2021.

Thanks in advance. 

Another_Saver

You are far more committed to banks accounts than I am.
If you may need it for a house deposit next year then how about opening a lifetimr ISA (https://www.moneysavingexpert.com/savings/lifetime-isas/). You can put £4k in by the 5th April 2021, and another £4k in on the 6th, for a 25% top up but the account has to be open for a year, so you couldn't use it before next November if you open it now, for a house purchase and only if you're a first time buyer.
Otherwise - may as well put it all in premium bonds.

Cptralls

Another_Saver said:

You are far more committed to banks accounts than I am.
If you may need it for a house deposit next year then how about opening a lifetimr ISA (https://www.moneysavingexpert.com/savings/lifetime-isas/). You can put £4k in by the 5th April 2021, and another £4k in on the 6th, for a 25% top up but the account has to be open for a year, so you couldn't use it before next November if you open it now, for a house purchase and only if you're a first time buyer.
Otherwise - may as well put it all in premium bonds.

Unfortunately I don't qualify for that scheme as I currently own a property. It looks like Premium Bonds then. 

MoneyMan01

Another_Saver said:

You are far more committed to banks accounts than I am.
If you may need it for a house deposit next year then how about opening a lifetimr ISA (https://www.moneysavingexpert.com/savings/lifetime-isas/). You can put £4k in by the 5th April 2021, and another £4k in on the 6th, for a 25% top up but the account has to be open for a year, so you couldn't use it before next November if you open it now, for a house purchase and only if you're a first time buyer.
Otherwise - may as well put it all in premium bonds.

I actually opened a Lifetime ISA a little while back with a quid, to get the "only use for house after 1 year" ball rolling.

I have nearly £12k in a Help to Buy ISA, however, that has a limit of house price that is lower than the Lifetime ISA (for where I live).

Are you saying, I could transfer £4k from my Help to Buy ISA to the Lifetime ISA now, then another £4k in April 2021, then a further £4k in April 2022?

I understand the Lifetime ISA has bigger penalties for withdrawing (for anything else other than house or pension), than the Help to Buy ISA though? So I would have to research that before doing anything.

Another_Saver

TheDarkKnight93 said:

Another_Saver said:

You are far more committed to banks accounts than I am.
If you may need it for a house deposit next year then how about opening a lifetimr ISA (https://www.moneysavingexpert.com/savings/lifetime-isas/). You can put £4k in by the 5th April 2021, and another £4k in on the 6th, for a 25% top up but the account has to be open for a year, so you couldn't use it before next November if you open it now, for a house purchase and only if you're a first time buyer.
Otherwise - may as well put it all in premium bonds.

I actually opened a Lifetime ISA a little while back with a quid, to get the "only use for house after 1 year" ball rolling.

I have nearly £12k in a Help to Buy ISA, however, that has a limit of house price that is lower than the Lifetime ISA (for where I live).

Are you saying, I could transfer £4k from my Help to Buy ISA to the Lifetime ISA now, then another £4k in April 2021, then a further £4k in April 2022?

I understand the Lifetime ISA has bigger penalties for withdrawing (for anything else other than house or pension), than the Help to Buy ISA though? So I would have to research that before doing anything.

I have no idea unfortunately, this is one of those weirdly specific areas. Maybe ask in a separate thread?

grumiofoundation

TheDarkKnight93 said:

Another_Saver said:

You are far more committed to banks accounts than I am.
If you may need it for a house deposit next year then how about opening a lifetimr ISA (https://www.moneysavingexpert.com/savings/lifetime-isas/). You can put £4k in by the 5th April 2021, and another £4k in on the 6th, for a 25% top up but the account has to be open for a year, so you couldn't use it before next November if you open it now, for a house purchase and only if you're a first time buyer.
Otherwise - may as well put it all in premium bonds.

I actually opened a Lifetime ISA a little while back with a quid, to get the "only use for house after 1 year" ball rolling.

I have nearly £12k in a Help to Buy ISA, however, that has a limit of house price that is lower than the Lifetime ISA (for where I live).

Are you saying, I could transfer £4k from my Help to Buy ISA to the Lifetime ISA now, then another £4k in April 2021, then a further £4k in April 2022?

I understand the Lifetime ISA has bigger penalties for withdrawing (for anything else other than house or pension), than the Help to Buy ISA though? So I would have to research that before doing anything.

Yes can do these 3 transfers (or pay new money in as you can have a lifetime ISA and a help to buy ISA). (Edit - posted by Alexland below first transfer would be £3999 if opened this year). 

So yes would have 12k paid in by end April 2022 (bonus would take ~month to pay). 

Lifetime ISA penalty is normally 25% (so get back less than paid in) - currently 20% until April 2021.

Help to buy ISA is penalty free for withdrawal. 

Alexland

TheDarkKnight93 said:

Are you saying, I could transfer £4k from my Help to Buy ISA to the Lifetime ISA now

Depends when you opened the LISA with £1 "a little while back" - if in the current tax year it would need to be a transfer of £3999 as a contribution or transfer of £4k may get entirely rejected.

MoneyMan01

grumiofoundation said:

Yes can do these 3 transfers (or pay new money in as you can have a lifetime ISA and a help to buy ISA). (Edit - posted by Alexland below first transfer would be £3999 if opened this year). 

So yes would have 12k paid in by end April 2022 (bonus would take ~month to pay). 

Lifetime ISA penalty is normally 25% (so get back less than paid in) - currently 20% until April 2021.

Help to buy ISA is penalty free for withdrawal. 

So if I transfereed £1k in and I wanted to withdraw that, I would only be able to get £750 out? Seems very harsh, given the Help to Buy ISA does allow free withdrawals for the same bonus.

Only difference being is that HTB is capped at £12,000 whereas I believe the Lifetime ISA doesn't have a cap?

Obviously puts a lot more pressure on you needing to 100% use the Lifetime ISA for a house / pension, whereas whilst it's great to use the HTB ISA for a house, not doing so won't mean you receive a 25% loss of your money.

YorkshireBoy

TheDarkKnight93 said:

So if I transfereed £1k in and I wanted to withdraw that, I would only be able to get £750 out? 

I don't qualify, on several fronts, but google is your friend...

 https://www.gov.uk/lifetime-isa

Alexland

TheDarkKnight93 said:

So if I transfereed £1k in and I wanted to withdraw that, I would only be able to get £750 out? Seems very harsh, given the Help to Buy ISA does allow free withdrawals for the same bonus.

If you contributed £1k you would get a 25% bonus (added a month or two later) to take the balance up to £1,250. If you withdrew this tax year there would be a 20% penalty to take the amount back down to £1k. If you withdrew in a subsequent tax year there would be a 25% penalty to take the amount down to £937.50 so a 6.25% penalty on your original contribution. If your solicitor withdrew towards a qualifying property purchase, subject to the account being open 12 months, there would be no penalty.

grumiofoundation

TheDarkKnight93 said:

grumiofoundation said:

Yes can do these 3 transfers (or pay new money in as you can have a lifetime ISA and a help to buy ISA). (Edit - posted by Alexland below first transfer would be £3999 if opened this year). 

So yes would have 12k paid in by end April 2022 (bonus would take ~month to pay). 

Lifetime ISA penalty is normally 25% (so get back less than paid in) - currently 20% until April 2021.

Help to buy ISA is penalty free for withdrawal. 

So if I transfereed £1k in and I wanted to withdraw that, I would only be able to get £750 out? No - explained by Alex  Seems very harsh, given the Help to Buy ISA does allow free withdrawals for the same bonus. Withdrawals from HTB ISA aren't really 'free' you are sacrificing the bonus (you just haven't seen the bonus yet) 

Only difference being is that HTB is capped at £12,000 whereas I believe the Lifetime ISA doesn't have a cap? That is one advantage, property price not being capped at 250k outside london is the other 

Obviously puts a lot more pressure on you needing to 100% use the Lifetime ISA for a house / pension, whereas whilst it's great to use the HTB ISA for a house, not doing so won't mean you receive a 25% loss of your money. You won't lose 25% as Alex explained.

Comments above.
I would (strongly) recommend (as with any financial product) you fully understand before you pay in, reads links below. 
https://www.gov.uk/lifetime-isa
https://www.moneysavingexpert.com/savings/lifetime-isas/

You may think Lifetime ISA rules are "very harsh" but you are getting free money, likely thousands towards a deposit thus enabling you buy a bigger property, and you aren't being forced to use it...