What to do with my money - I’m 18

ObbessedwithDominos

Hi,
I have just recently turned 18, and now I have full access to my savings and other accounts. Most of these accounts are quite low interest and I want some opinions on what I should do for the future. The money is kinda split like this:
Cash: 15000
Savings / ISAs: 4000
Premium bonds 4000
Any advice is appreciated.

Albermarle

The key point is what you want to use the money for, and the time scale involved ?
Only then can you decide where to keep it.

tacpot12

You are right to think about moving the money to somewhere where it will earn more interest. 

With the amounts involved, you might not have to worry about tax much, but even so, it might be better to move more of it into ISAs where the interest will be paid tax free.

If there is even the remotest chance you will want to buy a house as you grow older, you should look to max out your Lifetime ISA (LISA) allowance by putting £4000 a year into a LISA for as many years as you can. (You might do this for four years if you move the £15,000 to a LISA). The government bonus on the LISA will far outweigh the interest you might lose if you didn't take the best interest rates on offer for other ISAs. 

I would recommend keeping £4000 in an Instant Access Cash ISA in case you need the money urgently. (This would be your emergency fund). Make sure it is a real emergency before drawing on it!

QrizB

As others say, a lot depends on your plans. £15k in cash seems a lot unless you're planning to buy something expensive soon, you should think about moving some of it into an instant access ISA (as tacpot has already suggested).

Congratulations on having £24k saved at age 18; even allowing for inflation, that's 10x more than I had at your age!

Also, re. your screen name; are you obsessed with dominoes (the game) or Domino's (the pizza company)? It could be either

trickydicky14

QrizB said:

As others say, a lot depends on your plans. £15k in cash seems a lot unless you're planning to buy something expensive soon, you should think about moving some of it into an instant access ISA (as tacpot has already suggested).

Congratulations on having £24k saved at age 18; even allowing for inflation, that's 10x more than I had at your age!

Also, re. your screen name; are you obsessed with dominoes (the game) or Domino's (the pizza company)? It could be either

I could be wrong but at 18 I would say the second one.

Middle_of_the_Road

trickydicky14 said:

QrizB said:

As others say, a lot depends on your plans. £15k in cash seems a lot unless you're planning to buy something expensive soon, you should think about moving some of it into an instant access ISA (as tacpot has already suggested).

Congratulations on having £24k saved at age 18; even allowing for inflation, that's 10x more than I had at your age!

Also, re. your screen name; are you obsessed with dominoes (the game) or Domino's (the pizza company)? It could be either

I could be wrong but at 18 I would say the second one.

I would guess you're right, as the game has an 'e' after the o.
https://en.wikipedia.org/wiki/Dominoes

daveyjp

If you have no certainty over your immediate future I'd put it in the highest instant access savings account.  Could be an ISA, but beware of annual limit (£20k a year).

As you are only just 18 opening accounts may be a bit of a faff if you have no existing financial relationship with the new provider(s).

Stubod

..I would not bother with Premium Bonds with £4k, better to out in the best interest account you can find?

[Deleted User]

Potentially you should spend the money for experiences when you are young.

You have provided little detail. Others will therefore reply assuming you might struggle to afford a home in future or might neglect to build a pension...reasonable assumptions.

But for all we know you could be on track for a well paid career where building a pension comes easy and you will buy a home in a moderately priced area without a problem.

The point is, there are scenarios where actually spending the money would make sense.

Bostonerimus1

You are just fine for now. Use the next few months to educate yourself about your options ie LISAs, stocks and shares ISAs, investment funds and when you start work SIPPs and pensions. Learn something about budgeting and the UK's taxation. Use credit cards carefully and always pay them off at the end of the month and realize that investing and personal finances don't need to be complicated. Here are some things to remember:

1) "Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery." Mr. Micawber.

2) "K.I.S.S.", Kelly Johnson

3) "In investing, you get what you don't pay for", John Bogle

Eco_Miser

Bostonerimus1 said:

1) "Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery." Mr. Micawber.

Translating that into modern money (we stopped using nineteen and six as a money amount 54 years ago, and there's been massive inflation since Dickens' time):

"Annual income twenty thousand pounds, annual expenditure 19,975, result happiness. Annual income twenty thousand pounds, annual expenditure 20,025, result misery." Mr. Micawber.

Also by Micawber: "Something will turn up".