22 years old, what to do with £20-25k?

HCIMbtw

Bullet point 1 - there are no high interest cash cash savings account. But yes you might aswell for the few quid it will earn you. Could also put into NS&I premium bonds which enters you into a monthly prize draw for lottery tickets, should average the same or just below a cash saver. Could also look at fixed term savings, e.g. tucking away for a 3 year fixed return with a bacnk (meaning you cant access the money). 

Bullet point 2 - If you are using the money in a LISA for buying a house, I would think it would be considered as a deposit against your purchase. The mortgage will be for the amount you owe, and your earnings, outgoings and credit score will be evaluated by the bank to judge whether you can afford it or are eligible with a mortgage from them. 

Whether you have savings 6-12mths savigns is kind of irrelevant.  

Bullet point 3 - I would advise you get solicitors involved, ensure your equity in the property is protected in a contract (basically so all your deposit and mortgage payments  you have made until the contract is signed are protected and returned to you in case of a split). Then split everything down the middle from their on out 50/50, bills mortgage payments etc. 

It makes a break up messy, if you break up you either have to sell or buy your partner out. 

MX5huggy

sm12345 said:

jay1804 said:

What's your plans with the PCP, pay it off and own the car, return the car or get another PCP?

If you're not sure on buying a property maybe open a LISA with £1 to get the clock ticking.

I'll probably return the car and get another PCP since I'm not bothered too much about owning a car

With used car prices as they are (high) you will probably have a good bit of equity, don’t just give it back either use the equity as a deposit on the next one or make the ballon payment and sell it for profit. 

Personally I would pay the ballon and get off the PCP conveyor belt of always having that car payment every month, it adds up. If you really don’t ever want to own a car then lease is better than PCP. 

The statement about the teachers pension only being accessible at State Pension age is wrong. You can receive teacher pension from 55 (currently rises to 57/58 soon). But the amount you receive is reduced to reflect that you are taking it early and will receive it for more years, the reductions are fair you’re not penalised. It’s a bit academic at the moment, but if become a teacher join the pension (actually is probably don’t opt out). 

Buying a house should be seen as buying a home, buy one when you want to own one, don’t worry about the property market people have been waiting years for property to become cheap, meanwhile they haven’t owned their own home. 

tebbins

sm12345 said:

Thank you all for your advice so far, especially @grumiofoundation and @tebbins

All your advice is along the lines of what I was thinking to do with the money anyways, so it's good to hear I'm on the right track

I just have a few more questions (they might be silly, apologies if they are but as I say I'm clueless about finances)

- What should I do with the money in the meantime of maxing out my LISA since the max is 4k per year? Should I keep the rest in a high interest savings account?
Basically probably yeah

- Is money in a LISA not accounted for in a mortgage application? i.e. do I need 6-12 months expenses saved alongside a maxed out LISA?
This has been covered in the other answers in more detail. Your LISA counts towards your deposit (if you want to use it). There is a process to go through via a solicitor. You do not "need" 6-12 months of living expenses in cash savings, that is simply general savings advice to make sure you always have a buffer of cash so that you don't have to withdraw from your LISA (unlikely in your circumstances), or other savings/investments that may be less liquid (accessible) such as fixed savings accounts, S&S ISAs etc.

- What happens if I buy a home only in my name with a LISA, then in a few years want to get a joint mortgage with my boyfriend who would be a first time buyer? I'd always said I wanted my first home to be my own, and I think I want to move out before him, but of course at some point I want to have a joint mortgage with him. @grumiofoundation - is this where you'd recommend renting for a few years instead of rushing to buy so that I would avoid any fees in selling and rebuying?

...
Having a joint mortgage, and moving in with a partner are both serious, personal life decisions with potentially significant consequences. You may want to try moving into rented accommodation first - living together as working adults can be different to a relationship that developed through school/college/university. At the moment, apologies if I'm speculating, neither of you know what each other's economic/financial/job situation will be when you're ready to buy.

More information on how buying with a partner when you both have LISAs is available here: https://lifetimeisa.campaign.gov.uk. In short, yes you can both use your LISAs towards your individual first home purchase, even if buying with a partner who has already owned a home before.
Also, and this is pure opinion, I think house prices right now do not make sense. I am renting anyway because that suits my circumstances and not in a position to commit to a location because of work. I am trying to time the market, I may be wrong.

grumiofoundation

MX5huggy said:

The statement about the teachers pension only being accessible at State Pension age is wrong. You can receive teacher pension from 55 (currently rises to 57/58 soon). But the amount you receive is reduced to reflect that you are taking it early and will receive it for more years, the reductions are fair you’re not penalised. It’s a bit academic at the moment, but if become a teacher join the pension (actually is probably don’t opt out). 

Buying a house should be seen as buying a home, buy one when you want to own one, don’t worry about the property market people have been waiting years for property to become cheap, meanwhile they haven’t owned their own home. 

You are right. Thanks for highlighting, that shouldn't be in there. I thought I'd deleted it (edited post). 

(Agree with final point re housing as well).

grumiofoundation

sm12345 said:

Thank you all for your advice so far, especially @grumiofoundation and @tebbins

All your advice is along the lines of what I was thinking to do with the money anyways, so it's good to hear I'm on the right track

I just have a few more questions (they might be silly, apologies if they are but as I say I'm clueless about finances)

- What should I do with the money in the meantime of maxing out my LISA since the max is 4k per year? Should I keep the rest in a high interest savings account? As mentioned premium bonds are a good option.

- Is money in a LISA not accounted for in a mortgage application? i.e. do I need 6-12 months expenses saved alongside a maxed out LISA?  LISA can be used for part of deposit. 
- What happens if I buy a home only in my name with a LISA, then in a few years want to get a joint mortgage with my boyfriend who would be a first time buyer? I'd always said I wanted my first home to be my own, and I think I want to move out before him, but of course at some point I want to have a joint mortgage with him. @grumiofoundation - is this where you'd recommend renting for a few years instead of rushing to buy so that I would avoid any fees in selling and rebuying? Yes That is along the lines of what i meant. Buying, owning for only a couple of years, selling and buying again could well end up in you losing money over that time when you factor in all the fees. Plus also the hassle of moving twice. 

Re using LISA for purchase (also see link from Moneybox - we used moneybox ~6 months ago and worked as explained in link).

You save in LISA. Bonus is added ~5-7weeks after you pay in. 

When it comes to buying you can use all the money in the LISA towards deposit (you can use additional funds as well - i.e. you aren't limited to only using LISA).

Your solicitor will request the funds from your LISA and they will use towards house deposit.

https://www.moneyboxapp.com/faqs/lisa/how-can-i-use-my-lifetime-isa-to-buy-house/