How many accounts is too many?

jimjames

There's a calculation for the number of accounts that's too many which is N+2 where N is the number you have already

amanda1024

Agree with comments here on more to pensions, also ISAs - both great value for higher rate taxpayers. Premium bonds average out quite a bit lower than top ISA interest, but some people like the idea of winning. Regular savers are good for monthly savings and pay decent rates. ‘One of each’ would be my minimum, in practice I have multiples to cover different requirements/timescales/max out best rates

oscar2291

Thank you all so much for your time in responding. 

I will definitely increase my pension initially. Whilst I'll likely still continue to input to my premium bonds, I will likely increase the amount I'm contributing to my easy access savings (emergency fund) as recommended. The digital savings has around 6% interest up to 5k so I'll continue to contribute the maximum monthly until I reach this. I'll look into opening fixed further rate regular savers also.

In regards to the ISAs, would you suggest the help to buy or the S&S initially? I appreciate the risk with the latter. However I'm not 100% sure on my approach to buying property just yet (currently based in London, may inherit property etc.)

Thanks,
O

eskbanker

oscar2291 said:

In regards to the ISAs, would you suggest the help to buy or the S&S initially?

You can't open a Help to Buy ISA anymore, they were withdrawn from sale a few years ago - the Lifetime ISA effectively replaces them, with some advantages (higher annual contribution and property purchase limits) but also some disadvantages, such as withdrawals before 60 that aren't for a first time property purchase being penalised.

If you started a cash LISA on the basis that you'd be using it to support a first property purchase and then changed your plans, you could always convert it into a S&S LISA and retain it until 60 to avoid penalties and to boost retirement savings, but that's not for everyone....

Kim_13

oscar2291 said:

Thank you all so much for your time in responding. 

I will definitely increase my pension initially. Whilst I'll likely still continue to input to my premium bonds, I will likely increase the amount I'm contributing to my easy access savings (emergency fund) as recommended. The digital savings has around 6% interest up to 5k so I'll continue to contribute the maximum monthly until I reach this. I'll look into opening fixed further rate regular savers also.

In regards to the ISAs, would you suggest the help to buy or the S&S initially? I appreciate the risk with the latter. However I'm not 100% sure on my approach to buying property just yet (currently based in London, may inherit property etc.)

Thanks,
O

If you have a Help to Buy ISA (many people opened them with £1 ahead of their withdrawal in case they were useful in the future) then I would start there. If you then don’t buy a property or buy a property that is above the applicable limit to receive the bonus, you could access the savings plus interest with no penalty (ideally via transferring to a Flexible Cash ISA so as to retain the tax-free status.) If you were to inherit property, then you would do the same as you would no longer be entitled to hold the product. 

I can understand not wanting to fund a Lifetime ISA while unsure what you will be doing (especially as people who inherit part of a property then end up having to take a penalty or wait until 60 to access their savings.) If you don’t have a Help to Buy ISA open, it’s worth opening a Cash LISA with £1 (this starts the clock ticking in case you do later decide you’d like to use one towards a property purchase - they can’t be used for this until the account has been open for a year.) The LISA is also restricted to the under 40s, so worth getting one open while you qualify (you can still pay in until the age of 50 once the account is open.)

Anything that might be used for a property purchase within 5 years should not be put into S&S, as the risk is higher that you would have to sell at a loss. With sufficient funds elsewhere, you simply wait for the market to recover before selling.

badger09

jimjames said:

There's a calculation for the number of accounts that's too many which is N+2 where N is the number you have already

As I slide toward my mid 70s, each year my calculation should probably be N-2 where N is the number I have already. 

Or I could just leave my Executor(s), ie main beneficiary, to work very hard for his inheritance🤔