ISA vs Savings account as a first year uni student

sirt1mleton

Hello, I'm going into my first year of university in the next few weeks and im looking to start saving for my future. Parent's don't want me to get a job first year, which is fine. They cover my tuition and accom fees, and I get min sfe for a student living outside London. My monthly 'income' will be around £400 + 100/200 give or take, but the 400 will be a definite, and its likely in my first week ill get more than that but not sure exactly how much. Should i open an ISA or a savings account, or both, what are the benefits/costs of both, and how much should i put in? Thanks

Mark_d

Speaking from experience, I don't think you'll have much money to save whilst at university.  General living costs - food, drink and other activities can easily eat up £400 per month.  If I were you I'd use a Kroo current account (pays good interest) and where possible, put spending on a credit card - preferably one that gives cashback/reward points.  And you can set up a direct debit to repay your credit card in full each month.

Once you're in a permanent job and have more certainty about your income and outgoings then I'd suggest considering a Lifetime ISA eg https://www.ajbell.co.uk/isa/lifetime-isa

Cisco001

ISA.
You probably won't need to pay tax on the saving when you are studying.
However, since you can keep previous tax year allowance for future use, I would say it is till better to keep the money in a flexible cash isa.