Savings advice for 18 year olds

THAAWT

Please help my mind is boggled.

what would you suggest is best for someone who’s just turned 18
so far they’ve got 5k in premium bonds but not having much luck so looking to move it somewhere?

Emmia

How long do they want it tied up? What would the money be intended for?

If it's likely to be used for uni in a year or so... leaving it isn't an unreasonable choice.

If the intention isn't to spend it for 5, 10, 15 years a S&S ISA would probably be a better option - but comes at the risk of stock market dips.

THAAWT

Saving in the long run for a house deposit. But still would like access I think 
possibly could put some somewhere that they wouldn’t need for a while?

Beeblebr0x

On average, you're not going to have much luck with just 5k in Premium Bonds. 

QrizB

THAAWT said:

Saving in the long run for a house deposit. But still would like access I think 

If it's specifically for a house deposit, LISA is hard to beat. But you won't be able to get at it for anything other than a house deposit until you're 60, without paying a penalty.

InvesterJones

Beeblebr0x said:

On average, you're not going to have much luck with just 5k in Premium Bonds. 

Or more correctly, with 5k you're not going to have average luck - could be better, or worse.

OP, sounds like a somewhat medium length time frame - a multi-asset fund within a stocks and shares ISA has in the past beaten inflation and cash returns (which are the same as premium bonds more or less) while being a bit less volatile than 100% equities. You may have heard of the classic 60:40 fund (60% equities, 40% bonds) such as Vanguard Lifestrategy 60. If they might need it within 5-10 years then I'd be happy with that - if it looks like 10+ years then maybe pick the 80 fund instead. But it depends how you think they might react to down turns as well - if that's not palatable at all then maybe stick to cash ISA or a cash-like fund within a S&S ISA.

Cisco001

£5k is likely to go for a car/ driving lesson in near future...
Just stick it to cash isa.

Eyeful

You do not give much information to go on. So the following is just general guidance.

1. Live within your means.
2. Do not take on expensive debt.
3. If you do take on a credit card, make sure you are able to pay it off in full each month, so you are not charged interest (as this will be expensive debt).

4. Savings:  Money needed within 5 years

(a) should be in a savings account protected by the FSCS Savings protection scheme, up to £85,000.
This protection is only offered to Banks, Building Societies & Credit Unions on their list:
https://www.fscs.org.uk/check/check-your-money-is-protected/

(b) Look for the best interest Rates:
https://moneyfactscompare.co.uk/savings-accounts/

(c) Use a tax shelter when available (such as a Cash ISA)

5. Investing: Consider Investing, for money you will not touch for at least 10 years.
(a) Use tax shelters whenever possible (i.e Pensions & Stocks & Share ISA's)
(b) Consider: https://monevator.com/best-global-tracker-funds/

Emmia

Eyeful said:

You do not give much information to go on. So the following is just general guidance.

1. Live within your means.
2. Do not take on expensive debt.
3. If you do take on a credit card, make sure you are able to pay it off in full each month, so you are not charged interest (as this will be expensive debt).

4. Savings:  Money needed within 5 years

(a) should be in a savings account protected by the FSCS Savings protection scheme, up to £85,000.
This protection is only offered to Banks, Building Societies & Credit Unions on their list:
https://www.fscs.org.uk/check/check-your-money-is-protected/

(b) Look for the best interest Rates:
https://moneyfactscompare.co.uk/savings-accounts/

(c) Use a tax shelter when available (such as a Cash ISA)

5. Investing: Consider Investing, for money you will not touch for at least 10 years.
(a) Use tax shelters whenever possible (i.e Pensions & Stocks & Share ISA's)
(b) Consider: https://monevator.com/best-global-tracker-funds/

Did you use AI to generate this?

Eyeful

Emmia said:

Did you use AI to generate this?

No.
Its what I wished I had known about the subject at 18 years old.

El_Torro

I wouldn't bother investing this money, a lot of things are unclear at 18 years old. I also wouldn't put it in a LISA, at least not all of it. I would only put it in a LISA if I was sure I wouldn't touch the money until I was putting down a deposit on my first property. 

I think it's important to be clear how much of the money needs to be easy access. The rest can then go into a fixed rate savings account or even start feeding into a regular saver.