Advice please

badger09

If she pays £4k into a LISA & £16k into an ISA now, she won’t be able to pay any more in until 6th April 2024, when the new tax year starts. 

As the £20k annual ISA allowance is ‘use it or lose it’ she needs to work out whether a higher paying savings account will generate more interest than an ISA, even after taking tax. However, for a house purchase, the 25% bonus is a no brainer. 

Mantovani

Thanks Badger for this insight. I spoke with her today and she does want to save for a house deposit. The 40k has not earned a penny since she started squirreling it away in a Lloyds current acc. I think a LISA is a good start; should she put 4k in straight away? (if that is possible) or should she pay in £333 per month. I will hunt for a high paying savings acc for the rest; perhaps a two-year fix. I think she is just pleased that she will be getting some interest at last. However I want to do my best to see she gets the best rates she can - if only for a while. I am surprised that the Lloyds did not contact her about her 40k in a current account.

Cheers

David

AndrewSteele888

I doubt that would contact her as for them its easy money which I why would suggest to do ASAP

grumbler

Mantovani said:

 I think a LISA is a good start; should she put 4k in straight away? (if that is possible) or should she pay in £333 per month.

>> Lifetime ISA (LISA): how they work & best buys

 I am surprised that the Lloyds did not contact her about her 40k in a current account.

I am not. And I don't think they offer anything decent except their Monthly Saver.

Catplan

They were towards the top end of 2 year fixed isa for a bit with a 5.5% offering, much better that the current account.

badger09

Mantovani said:

Thanks Badger for this insight. I spoke with her today and she does want to save for a house deposit. The 40k has not earned a penny since she started squirreling it away in a Lloyds current acc. I think a LISA is a good start; should she put 4k in straight away? (if that is possible) or should she pay in £333 per month. I will hunt for a high paying savings acc for the rest; perhaps a two-year fix. I think she is just pleased that she will be getting some interest at last. However I want to do my best to see she gets the best rates she can - if only for a while. I am surprised that the Lloyds did not contact her about her 40k in a current account.

Cheers

David

I’m not up to date with current Cash  LISA rates but they’ve generally been lower than ‘normal’ ISA. She could open the highest rate account with £1 or whatever minimum is specified, save elsewhere at a better rate, then pay in the balance up to £4k by, say, end of March. Or pay in the full £4k now if rates are comparable. If she pays in £4k immediately, the £1k bonus will be added so £5k will earn interest. 

May I also suggest that if your daughter has £40k in her current account and wants to buy her own home, she should start learning a bit more about savings, ISAs, pensions, tax etc. Perhaps instead of you looking for accounts for her, you look together & discuss pros & cons of each type. 

Albermarle

 I am surprised that the Lloyds did not contact her about her 40k in a current account.

Why would they do that, she is the perfect sort of customer for them.

xylophone

https://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html

https://www.moneyboxapp.com/isa/lifetime/cash/