best savings account for over 40s to save mortgage deposit

TheUmpteenth

Hi.

I am in the amazingly lucky position to have got a massive wage rise (by switching company).

We were already saving for a deposit, but it was never getting beyond a few thousand. This will change things, however.

If we keep living costs as they are or tighten a little, we can put away £800pcm.

We looked at Lifetime ISA, but we're too old. With the current housing climate, we are considering something with a locked term, but I'm not sure of the implications when we are making regular deposits.

Can anyone give us some advice as to where to put our money? Even in a general sense?

Honestly, this feels like the chance of a lifetime, and we just don't want to waste it!

ForumUser7

TheUmpteenth said:

Hi.

I am in the amazingly lucky position to have got a massive wage rise (by switching company).

We were already saving for a deposit, but it was never getting beyond a few thousand. This will change things, however.

If we keep living costs as they are or tighten a little, we can put away £800pcm.

We looked at Lifetime ISA, but we're too old. With the current housing climate, we are considering something with a locked term, but I'm not sure of the implications when we are making regular deposits.

Can anyone give us some advice as to where to put our money? Even in a general sense?

Honestly, this feels like the chance of a lifetime, and we just don't want to waste it!

@theumpteenth Glad to hear your good news! 

With you wanting to make regular monthly deposits, there are a few options which will pay better than easy access.

Regular Savers are the first thing that comes to mind, as with some of them you can make withdrawals mid-term - in case you need to for whatever reason. Some of these do have variable rates but it is possible to get fixed rate regular saver bonds. You could open a few of these and fund them monthly. For example, if you want fixed rate regular savers, based on top rates and £800 per month you could open the Monmouthshire BS Christmas Saver Bond - Issue 5 £200 @5.5%, Lloyds Bank Club Lloyds Monthly Saver £400 @5.25%, Principality BS Christmas 2023 Regular Saver Bond £125 @5%, Bank of Scotland Monthly Saver £250 @4.5%

That said, if you would prefer a guaranteed rate, and are looking long term (lots of regular savers are 1 year), fixed rate bonds may be worth a look. You could open one each month and deposit £800 into each of them. This is more admin, but if you keep a clear record such as a spreadsheet it should be ok. That said, if fixed rate bond rates continue to drop, your later account openings will earn a lower rate than your earlier account openings.

You might want to consider stocks and shares, but personally I wouldn’t as it’d be sad if by the time you needed the funds they’d lost value - of course there is no predicting these.

It all depends how long you thing you’ll need to save for - if you think it might be a year, regular savers would be a great option. If you think it might be 3/4/5, fixed rate bonds may be better if you definitely won’t need access before then, as you won’t need to restart the saving pattern each year. Hopefully this is helpful - have a look at the account summary boxes and terms and conditions before taking any action to see what will work for you best.

Band7

Regular Savers for the next 12-24 months. Then review. 

https://forums.moneysavingexpert.com/discussion/6106986/regular-savings-accounts-the-best-currently-available-list/p1

Pay attention to how much tax you are paying and make sure your and your partner's pension arrangements are optimised.

cricidmuslibale

ForumUser7 said:

TheUmpteenth said:

Hi.

I am in the amazingly lucky position to have got a massive wage rise (by switching company).

We were already saving for a deposit, but it was never getting beyond a few thousand. This will change things, however.

If we keep living costs as they are or tighten a little, we can put away £800pcm.

We looked at Lifetime ISA, but we're too old. With the current housing climate, we are considering something with a locked term, but I'm not sure of the implications when we are making regular deposits.

Can anyone give us some advice as to where to put our money? Even in a general sense?

Honestly, this feels like the chance of a lifetime, and we just don't want to waste it!

@theumpteenth Glad to hear your good news! 

With you wanting to make regular monthly deposits, there are a few options which will pay better than easy access.

Regular Savers are the first thing that comes to mind, as with some of them you can make withdrawals mid-term - in case you need to for whatever reason. Some of these do have variable rates but it is possible to get fixed rate regular saver bonds. You could open a few of these and fund them monthly. For example, if you want fixed rate regular savers, based on top rates and £800 per month you could open the Monmouthshire BS Christmas Saver Bond - Issue 5 £200 @5.5%, Lloyds Bank Club Lloyds Monthly Saver £400 @5.25%, Principality BS Christmas 2023 Regular Saver Bond £125 @5%, Bank of Scotland Monthly Saver £250 @4.5%

That said, if you would prefer a guaranteed rate, and are looking long term (lots of regular savers are 1 year), fixed rate bonds may be worth a look. You could open one each month and deposit £800 into each of them.

There are unfortunately relatively few savings providers who issue fixed rate bonds with minimum deposits of less than £1000. I can think of Coventry Building Society, Nationwide, Principality, Yorkshire Building Society plus Atom, Cahoot, Ford Money, Hampshire Trust Bank, NS&I, Tandem and Virgin Money. There may well be a few others who I’ve temporarily forgotten about. However with most banks & building societies, especially those who tend to offer the very highest interest rates on their fixed rate bonds, the minimum deposit will very often be £1000, sometimes £5000, sometimes £10000, and for some, even as high as £25000!

Band7

cricidmuslibale said:

There are unfortunately relatively few savings providers who issue fixed rate bonds with minimum deposits of less than £1000. I can think of Coventry Building Society, Nationwide, Principality, Yorkshire Building Society plus Atom, Cahoot, Ford Money, Hampshire Trust Bank, NS&I, Tandem and Virgin Money. There may well be a few others who I’ve temporarily forgotten about. However with most banks & building societies, especially those who tend to offer the very highest interest rates on their fixed rate bonds, the minimum deposit will very often be £1000, sometimes £5000, sometimes £10000, and for some, even as high as £25000!

This isn't a real issue for quite some time if the maximum monthly deposit is some £800. This sum of money can easily be deposited into Regular Saver accounts paying 4.5% upwards. Also, the 5% Barclays Rainy Day Saver has no minimum deposit at all and takes up to £5,000. The larger challenge, if there is one, is to get the requisite current accounts set up - though that's hopefully just a matter of getting the applications in and setting up the accounts.

MovingForwards

I saved mine with regular savers and fixed rate accounts.

As I knew roughly what year I'd be ready to buy, each Christmas I would open a new fixed rate account and drop in a bulk amount of money, leaving some for an emergency fund. Opening up another regular saver or a few of them depending on how much I was putting away. 

Since buying I've just stuck with regular savers and continued to save, overpaying the mortgage each payday and paying into a SIPP; my company pension is deducted from salary.

diystarter7

Band7 said:

Regular Savers for the next 12-24 months. Then review. 

https://forums.moneysavingexpert.com/discussion/6106986/regular-savings-accounts-the-best-currently-available-list/p1

Pay attention to how much tax you are paying and make sure your and your partner's pension arrangements are optimised.

Excellent link, thanks