What to do with savings in the current climate? 15 February at 2:01PM in Savings & investments 7 replies 814 views

SpethHimme

Hi all, I'm hoping to just get some general advice when it comes to savings.

I'm currently living with my parents but (hopefully) looking to buy my first property in 2024 or 2025. My current costs are minimal, but I don't currently have the capacity to save a lot.

I'm utilising the NS&I Direct Saver account for a large majority of my savings (because it contains over £100k so it's protected, and the interest rate is at 2.8%) and I also have a separate NatWest ISA which has a 2% interest rate and contains £100k.

I haven't yet used any of my 20k ISA allowance this year (I've had the same ISA for multiple years), and probably would only be able to transfer about £5k to the ISA, but I was wondering the following:

1. Does anyone know if you can create a new ISA (which has a higher interest rate) and transfer a portion of the amount from another non-ISA account but still have the 20k tax-free availability? (E.g I wanted to transfer some of the money from my NS&I account to the new ISA).

2. Aside from the NS&I premium bonds, I may want to think about a stocks and shares ISA, but wondering if it's useful? Otherwise would there be any other suggestions for putting my money into a savings accounts for the next year or so? I most likely would not need to access it.

Thanks in advance!

Bigwheels1111

Change the isa for sure, take a 1 or 2 year deal.

Even the easy access isa one is better then your non isa savings rate.

If you have not saved in an ISA this year you could stick 20k in now and another 20k in on the 6th April I think.

https://www.moneysavingexpert.com/savings/best-cash-isa/

Pick a fixed rate for 1 or 2 years, No access until end of term.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Just watch out fot tax on interest

Albermarle

 but (hopefully) looking to buy my first property in 2024 or 2025. 

Sounds like you should be looking at a LISA for the 25% bonus for first time buyers.
Lifetime ISA (LISA): how they work & best buys - Money Saving Expert

Band7

Investec have a 90 day notice account paying 3.55%. I you stick £80k of your £100k into it, you get £2,840 in interest over a year, as opposed to £2,240 - - - £600 difference. Unfortunately, anything outside an ISA is taxable, so you'd have to pay at least 20% tax on your interest.

Definitely move £20k into a good ISA now (not forgetting some into a LISA), and do the same again after April 5. It saves you a bucket full of tax! List of ISAs: https://moneyfacts.co.uk/isa/

jimjames

SpethHimme said:

I'm utilising the NS&I Direct Saver account for a large majority of my savings (because it contains over £100k so it's protected, and the interest rate is at 2.8%) and I also have a separate NatWest ISA which has a 2% interest rate and contains £100k.

I haven't yet used any of my 20k ISA allowance this year (I've had the same ISA for multiple years), and probably would only be able to transfer about £5k to the ISA,

Why can you only put £5k in your ISA when you've got such a large savings balance? I'm not sure I follow the reasoning when you can add £20k now and £20k in April.

london21

SpethHimme said:

Hi all, I'm hoping to just get some general advice when it comes to savings.

I'm currently living with my parents but (hopefully) looking to buy my first property in 2024 or 2025. My current costs are minimal, but I don't currently have the capacity to save a lot.

I'm utilising the NS&I Direct Saver account for a large majority of my savings (because it contains over £100k so it's protected, and the interest rate is at 2.8%) and I also have a separate NatWest ISA which has a 2% interest rate and contains £100k.

I haven't yet used any of my 20k ISA allowance this year (I've had the same ISA for multiple years), and probably would only be able to transfer about £5k to the ISA, but I was wondering the following:

1. Does anyone know if you can create a new ISA (which has a higher interest rate) and transfer a portion of the amount from another non-ISA account but still have the 20k tax-free availability? (E.g I wanted to transfer some of the money from my NS&I account to the new ISA).

2. Aside from the NS&I premium bonds, I may want to think about a stocks and shares ISA, but wondering if it's useful? Otherwise would there be any other suggestions for putting my money into a savings accounts for the next year or so? I most likely would not need to access it.

Thanks in advance!

Lisa will be a good idea read the criteria should meet it.

Barclays 1 year fixed Isa offers 4% interest much better than what you are currently getting and they allow transfers. 

GazzaBloom

If you open a LISA you can gain a quick £2,000 this springtime by putting £4,000 in now and another £4,000 from 6th April. Moneybox's Cash LISA is paying 3.5% interest on the cash balance on top of the Government 25% top up as well.

£2K free money, what's not to like?

P1Fanatic

Yep LISA is a no brainer especially as you can double up now and on/after April 6th and then again April 6th 2024 & 2025 depending on when you end up buying a house. The £4k you put in the LISA each year will count (the £1k bonus you earn does not count) towards your overall £20k ISA limit per year. Just make sure its suitable for intended purchase as one requirement is the house must cost less than £450k and it sounds like you have a hefty deposit so might be looking at higher price properties.