How to maximize my savings

FirstTimeSolo

Hello 
I am currently renting in London and will be relocating within the country for up to 3 years for a work assignment which means this is not a good time for me to buy. 
I have around £150k savings (in Marcus, one cash ISA with super low rate, Premium bonds). I save at least £2k per month. Any help and advice on what I can save into for the next 3 years or so. 
Thanks

grumiofoundation

If you are planning to buy a house in the UK at some point have you looked at the lifetime ISA?
https://www.moneysavingexpert.com/savings/lifetime-isas/
https://www.gov.uk/lifetime-isa

Savings rates are pretty low so you can't really get a huge amount more than what you have. 

Although you shouldn't invest purely because interest rates are low depending on your timescale for buying a property and how much you would need to use for a deposit you may want to look at investments for some of the money (whether the savings you currently have or investing a % of future savings). Obviously comes with the risks associated with investments and would not be suitable to have deposit money in investments as you near buying a property.  

FirstTimeSolo

grumiofoundation said:

If you are planning to buy a house in the UK at some point have you looked at the lifetime ISA?
https://www.moneysavingexpert.com/savings/lifetime-isas/
https://www.gov.uk/lifetime-isa

Savings rates are pretty low so you can't really get a huge amount more than what you have. 

Although you shouldn't invest purely because interest rates are low depending on your timescale for buying a property and how much you would need to use for a deposit you may want to look at investments for some of the money (whether the savings you currently have or investing a % of future savings). Obviously comes with the risks associated with investments and would not be suitable to have deposit money in investments as you near buying a property.  

Thanks for your reply. Sorry to clarify, I will probably wait a few more years before I buy, maybe around 6-7 years from now. 

Albermarle

As suggested maximum £4K pa in a LISA would seem like the first step.
For the longer term , extra contributions to a pension are always a good idea, even if it is only increasing your contribution by a few per cent , it can build up over the years .
For the remaining money ( or some of it ) 6 to 7 years is just about long enough to reduce the risk of investing to a tolerable level ( but not to eliminate it) Normally > 10 years is recommended.

FirstTimeSolo

To update I have put in a small amount in etoro to try it out with help from some friends who are traders. The view is to eventually transfer my useless cash isa to a stocks and shares isa

steampowered

I would avoid Lifetime ISAs in your situation. They can only be used to buy a home worth up to £450,000. That is not really enough to buy a good property in London, particularly if you are sitting on a £200k deposit.

You could consider investing your money into a stocks & shares - try a passive fund which is diversified across many companies, such as Vanguard Lifestrategy funds or HSBC All Share ETF. The stock markets tend to generate about 7-8% per year on average, though some years are better and some years are worse.

This article provides a very good explanation of what risk you would be taking by investing in a passive stock market investment over a 6-7 year time period: https://www.nutmeg.com/nutmegonomics/increasing-your-chances-of-positive-portfolio-returns-the-facts-about-long-term-investing

Etoro is very high risk, if you are using it to do short term trading or leveraged trading. A sensible investment with the bulk of your money is a better idea than  wild gambling with some of your money.

FirstTimeSolo

Thanks. I’m not ‘wild gambling’ I’ve only put in a small amount of £1000, I’m not using leverage and the stocks I’ve invested in is based on advice from friends who trade professionally. I’ll have a look at vanguard and hsbc, thanks for those. 

colsten

FirstTimeSolo said:

Thanks. I’m not ‘wild gambling’ I’ve only put in a small amount of £1000, I’m not using leverage and the stocks I’ve invested in is based on advice from friends who trade professionally. I’ll have a look at vanguard and hsbc, thanks for those. 

Single stock investment is wild gambling. No respectable professional trader would risk all their money on just one company, and amateur investors (which most investors will be, for their entire lives) don't generally have the time or the skills to assess the likely performances of a given company - and even if they had the time & skills, they could get their predictions horribly wrong. Glad you will be looking into Funds, as they can spread your risk. 

DireEmblem

First things first - although your money is fairly safe in Marcus, you are only covered up to £85k in any institution under the FSCS scheme, so you might want to spread it out a bit for some more comfort.

AlanP_2

FirstTimeSolo said:

Thanks. I’m not ‘wild gambling’ I’ve only put in a small amount of £1000, I’m not using leverage and the stocks I’ve invested in is based on advice from friends who trade professionally. I’ll have a look at vanguard and hsbc, thanks for those. 

That all sounds good as long as you want to TRADE and not INVEST - they are very different.

FirstTimeSolo

colsten said:

FirstTimeSolo said:

Thanks. I’m not ‘wild gambling’ I’ve only put in a small amount of £1000, I’m not using leverage and the stocks I’ve invested in is based on advice from friends who trade professionally. I’ll have a look at vanguard and hsbc, thanks for those. 

Single stock investment is wild gambling. No respectable professional trader would risk all their money on just one company, and amateur investors (which most investors will be, for their entire lives) don't generally have the time or the skills to assess the likely performances of a given company - and even if they had the time & skills, they could get their predictions horribly wrong. Glad you will be looking into Funds, as they can spread your risk. 

Yes, I have the £1000 across 3 stocks. This is just a taster though, not something I will put all my money in. More likely to go down the S&S ISA route.