Inherited £3000 where should I keep it

wigglers

Hi experts, 

My fiancé's dad passed away and it's not much but she has been given £3000 from it. We are looking at using it wisely and trying to start saving for a house deposit. I've been looking at Lisa' s as I know i can save £80 a week or more  which would mean a free £1000 from the gov a year. The thing is she's 41 and I'm approaching 39. The cut off was 40 so could we transfer it to my account then open it in my name? And also is this the best way to go about saving up over a few years for a deposit or are we better putting it into a different type of account? We both work and want our own place asap.
Thanks in advance 😀

FreeBear

Best long term return would be to shove the £3K in to her pension fund (in my unqualified opinion). Yes, it ties up the money until retirement age, but the pension pot could be used to pay off the mortgage.

wigglers

Yeah but we need it to use as a start of a deposit for a mortgage, and looking to get one in the next few years. After adding am amount monthly now i have a much better paying job. 

Ramouth

The government bonus makes the LISA pretty hard to beat. Once you get to the yearly limit you could then look at regular savers which often have the best rates.

As a side note, it is worth opening a LISA now even if you don’t use it for your deposit savings as it is a good way to top up your retirement savings.

wigglers

Yeah i thought as much, so the limit is £4000 a year?ebay kind of Lisa is best? Like any better known companies then the other? Also she's only just over 40 if we wanted to double the contribution is there anyway to max it? If she was 39 she could have been intitled to the bonus.. If you see what I mean? 🤔 

Tiglet2

For the £3000 lump sum:

If you bank with Barclays and are a Blue Rewards Customer, there is a Rainy Day Saver paying 5.12% for up to £5000.

If you don't bank with Barclays, what accounts are on offer at the bank you are with?

Coventry BS and Nationwide also offer good reasonably high interest rate accounts, better if you are already a customer.

You could also try your luck at Premium Bonds

Maybe an investment bond, where you lock the money away for 1, 2 or 3 years and receive a fixed interest rate


For the regular monthly savings:

How about a regular savings account?  

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

Tiglet2

As your fiance is over 40, then only you could open one LISA.  How would your fiance feel about handing over his inheritance to you and how would this be protected in the event of a split?  Not suggesting that would happen by the way!

I'm sure you've already looked into it.  Seems pretty good, though if you intend to save more than £4000 per year, you'd have to think about another savings account.  You could deposit your £3000 and then feed in the remaining £1000 for the rest of the year, then carrying on paying in £4000 each year after that.

How much deposit will you need to buy a property where you live?

se2020

You can't open a Lisa over 40 so you will be limited to just one.

It needs to be open for a year before buying a house to use the bonus on it.

If you opened a Lisa now and paid £3000 into it you would get a £750 bonus in a months time.

Then 25% bonus on anything else you pay in before next April.

Next April you get another £4000 allowance and another £1000 in bonus if you pay another £4000 into it.

You also get paid interest on the total amount in the Lisa. This will only be around 3% but added to the 25% bonus makes it unbeatable 

However, if you need the money for anything other than a house purchase the fees for taking it out will leave you worst off.
You can take the funds out for retirement at 60 but, due to the lower interest rate there are probably better options for pension/long term savings.

wigglers

No we are happy to not touch it and keep saving it for a deposit. She is happy to have me open it in my name as most of the accounts are in my name anyway. If we can deposit £3000 now and get £750 extra in a month's time that seems like a no brainer. Then another 25% each year on.
Looks like Coventry b.s @ 4.1% is the best one at the minute.
So how much can i save in total £4000 a year?
And if we wanted to save more what's the best way to go about that? Just a normal isa?

Tiglet2

LISA:   If you put in £3000 now, you can only put in another £1000 before April 24, roughly about £125 per month from now.   Then from April 24 you get a new yearly allowance of £4000, so you could put in £333.33 per month.  If you're likely to save more than this, you would need to look at other savings accounts.

FreeBear

wigglers said: And if we wanted to save more what's the best way to go about that? Just a normal isa?

Have a look at credit unions - Some of them offer saving via payroll deductions which makes saving very easy. The interest rates can often be better than high street banks.