Best way to save for home renovations?

Jacks_xxx

Hiya my lovelies, :wave:

We're totally clueless about saving (having never really done it before. ) so I thought I'd ask for a little friendly advice.

We need to have about £40k worth of structural building repair work done to our house, and soon we're going to be able to start saving £500 a month towards this.

What's the best way to go about it do you think?

Love Jacks xxx

[Deleted User]

Have a look at ISAs, specifically this page:

http://forums.moneysavingexpert.com/showthread.html?t=401374

For example, the following ISA may be suitable:

http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=homefreegroup&value=14230

You could also consider regular savings accounts, specifically this page:

http://forums.moneysavingexpert.com/showthread.html?t=608697

For example, the following regular saver may be suitable:

http://forums.moneysavingexpert.com/showthread.html?t=942779

As pointed out in post 5 of this link... "consider £3k in a 6% easy access account dripping into the 10% account - that's essentially 8% average on the £3k. Which beats most fixed rate products - albeit with a bit more work?"

Something to consider when choosing which savings vehicle is best for you.

One final page to know about is the savings calculator:

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#savingscalc

Jacks_xxx

Thanks so much hon! :T

I'm going to go and get a :coffee: and sit down and digest that little lot.

Cheers sweetie!

Love Jacks xxx

[Deleted User]

One other thing you may like to consider is getting a decent instant access savings account, specifically this page:

http://www.thisismoney.co.uk/saving-and-banking/best-savings-rate/article.html?in_article_id=394164&in_page_id=50

For example, the following instant access account may be suitable:

http://www.kaupthingedge.co.uk/OurProducts/KaupthingEdgeSavingsAccount.aspx

nicko33

You want the highest rate of interest after tax, and that may not be a cash ISA, especially if you are a basic rate taxpayer.

There are longer term benefits to Cash-ISAs, but if you know you will be spending all the money in the short-medium term, you have to make a judgement.

At least for the first year consider a Regular Saver such as
http://forums.moneysavingexpert.com/showthread.html?t=942779

Do you just need 40,000 in 6+ years time, or will you want to do parts of the works at various intervals? If you need some of the money at various intervals, you need to consider any access restrictions that may be present on the higher rate accounts.

jamesd

Jacks xxx, that target is about six years away so you're well into the area where investing is suitable provided you're content with some ups and downs. For a mixture that won't go up and down a lot in the short term you might consider:

30% BlackRock UK Absolute Alpha
20% Cru Investment Portfolio
20% Invesco Perpetual Monthly Income Plus
20% Invesco Perpetual Income
10% Neptune Global Equity

The chart shows how the volatilities differ and why so much is in the more stable ones (colors are red, blue, yellow, green, gray in fund order).

This mixture isn't best for high stock market growth times. It's selected to not go down much in bad times, so that those who are used to savings accounts won't ge a shock but can still expect to see their money grow by about 8-10% a year on average. While it's intended for a stocks and shares ISA, half or more is not in traditional stocks and shares holdings.

Hargreaves Lansdown are one of many stocks and shares ISA providers who provide monthly investing options that would handle this without trouble.