Joint account to save for mortgage deposit?

JustSomeGeek

Hi folks,

4 of us want to buy a house, but we need to save for a deposit. I read on MSE that there is a new ISA thingy coming, that should be specifically for that.

Until that happens, what could we get to start saving now,that would allow us to transfer everything into the new ISA? We don't need/want access to the funds until then.

Thanks!

Keep_pedalling

The I in ISA stands for individual so you can’t have a joint ISA. What “thingy” have you read about?

Exodi

You would save it in your own personal accounts (e.g. savings accounts, Cash ISA, etc), then when the First Time Buyer ISA launches you can move the money in to that.

Depending on how you are funding the deposit (e.g. lump sum or regular contributions from wages), a regular saver could be a good idea.

Nonetheless, I would not recommend commingling your money in a joint account until you are ready to purchase. I have had a lot of friends come and go over the years, and I have been burned financially in the past due to naivety. I'd encourage others not the make the same mistakes where they can avoid it. One messy argument and one person could empty the account.

The other thing to consider and a problem of buying with friends is that one of you may well meet the love of your life and have a change of plans.

Albermarle

Nonetheless, I would not recommend commingling your money in a joint account until you are ready to purchase. I have had a lot of friends come and go over the years, and I have been burned financially in the past due to naivety

I agree with this . Having a joint account with flatmates to pay bills etc. is one thing, but saving thousands of Pounds over a potentially long period of time would be a no for me.

JustSomeGeek

https://forums.moneysavingexpert.com/discussion/comment/82160186#Comment_82160186

https://forums.moneysavingexpert.com/discussion/comment/82160186#Comment_82160186

https://www.moneysavingexpert.com/savings/first-time-buyer-isa/

This thingy. I have no idea what ISA's are, so it's a thingy. :-)

So we would need to get one each, to pool our savings?

Thank you

JustSomeGeek

https://forums.moneysavingexpert.com/discussion/comment/82160244#Comment_82160244

Well a joint account between the 4 of us seemed like a tidier option. We are all family rather than friends, and it's very likely anything will change due to health and disability issues, which is what prompted us to get a house in the first place.

So just a normal bank saver account from our bank, or is there anything specific that would give us a better start to our pot?

Thank you

JustSomeGeek

https://forums.moneysavingexpert.com/discussion/comment/82160549#Comment_82160549

We are a family, and our money is already used for a lot of things jointly, so it's not the same kind of risk, but thank you.

Exodi

JustSomeGeek

Well a joint account between the 4 of us seemed like a tidier option. We are all family rather than friends, and it's very likely anything will change due to health and disability issues, which is what prompted us to get a house in the first place.

So just a normal bank saver account from our bank, or is there anything specific that would give us a better start to our pot?

Considering the significant risks that can come from a joint account (again, one person can empty it at whim - there is no legal recourse), I think doing it just because it 'seemed a tidier option' is ill-advised.

Being family instead of friends doesn't really change what I said unfortunately, we see accounts of people being burned by family members all the time on this forum. The general wisdom is to not mix money and family.

At the very least not pooling money in a joint account for the sake of it. I'm sure you may read this shaking your head thinking "he doesn't know our family, we wouldn't do that to each other" but yet it happens all the time, no-one enters these arrangements knowing they will fail.

My other comment, about meeting love interests, is also still valid. How old are you (feel free to not respond on that if you feel it's too personal) - the reason I ask if is you are young, then I'd suggest while it might seem like a good idea now, getting on the housing ladder early and all that, is it compatible with longer term ambitions like meeting a partner, potentially having kids, etc? Is the plan for all the future partners to also move into the house? What if they're not onboard with that? Will you all stay single forever? Will you each try to buy the person out when the time comes (but what if you can't afford to)? Etc.

I appreciate this isn't the question you asked, and you might not be particularly interested to hear opposing views so on your specific question:

JustSomeGeek

So just a normal bank saver account from our bank, or is there anything specific that would give us a better start to our pot?

It depends (sorry I hate that answer) - as depending on your income tax bracket and your current savings, you may need to pay tax on the interest. I don't want to massive overcomplicate all this, but if we assume you have less than say £25k of savings, and you are a basic rate (20%, e.g. earning less than £50k p/a) tax payer, you wouldn't pay tax so a normal savings account or an ISA doesn't actually make any difference to you.

In these circumstances, and if you are funding it from your wages (for example, adding £250 a month or something), I would recommend a regular saver as they offer unbeatable savings rates on regular contributions: https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/