Saving for a deposit - FTB

bigyellowsunflowers

I am saving for a deposit for my first home. I’ve actually reached my initial goals, but as I am looking to convert being in a contract role into a permanent position, I am continuing to save while searching for a new job, which will give me an even bigger deposit.

When I first decided to start saving a few years ago, I wasn’t thinking about a mortgage and was moving my money around in ISAs to get the best rate. After hitting £20,000 in my ISA last year I decided to give premium bonds a try as a higher rate tax payer. I’ve stuck to premium bonds as a method of saving through to this tax year, as my thinking is that if I keep this lot of savings in the same place it will be more traceable when showing how I’ve saved for my deposit. Unfortunately, I’ve never won (not even £25), and I think it’s time to use this year’s ISA allowance with some of the money I have in premium bonds.

My concern is the extra paper trail in moving money that’s traceable via my wages to NSandI into another account. I have another fixed ISA that matures in October so an option could be to move that along with using this year’s ISA allowance into a new ISA, which will put most of my deposit in one place.

Does anyone have any advice specifically about how clear the paper trail should be when getting your first mortage and if I should try to keep my money in the same place (even if it’s premium bonds where it isn’t growing) when proving how I have saved for my deposit?

Should I also stop buying lottery tickets online?

Thanks

Albermarle

You do not mention a LISA, a no brainer for FTBs.

Unfortunately, I’ve never won (not even £25)

Seems like you have been incredibly unlucky to have tens of thousands in PBs for about a year and not won anything at all.

bigyellowsunflowers

I’ve been really unlucky. I understood it was a lottery when I signed up but to not even win £25! I definitely don’t think premium bonds are for me once I’ve bought somewhere but at least I have a lot of my savings in one place.

I haven’t considered a LISA as I am expecting excepting to buy within a year.

Sooz1966

You're referring to Anti Money Laundering (AML) requirements i think. Don't worry but good to plan ahead. When you move money from one account, download and save the last statement showing the final balance, then do the same for the first statement of the new account - your conveyancer will then be able to see the money leave and arrive.

Your main banking account will show wages in and transfers out to savings accounts. So, when you need to, you can download how ever many months they'll need.

Don't make decisions about where to put your money based on your need to prove source of funds, that's just daft, go for the best rates and save yourself future hassle by keeping copies as you go.

bigyellowsunflowers

Thanks @Sooz1966 this is the advice I needed.

saajan_12

Don't let the tail wag the dog - whether thats the tax or the paper trail.

You mention higher rate tax as the main reason for premium bonds, but I'd just focus on the highest interest net of tax where applicable, which for smaller amounts may well be high interest accounts.

Re paper trail, I'd focus on how to maximise the return on your money, not how to prove the history of your deposit. As long as you keep the statements of accounts especially when you close them, its not a problem. Now of course there's a limit, I wouldn't move every week to eek out every 0.01% higher interest, but a couple of moves is fine. Depending on how far you are from buying, they may not look this far back anyway if the deposit is within what you could have saved from your income and have had it consisitently for 6+ months.