£200 a month savings - ISA?

socks_uk · 15 September 2019 at 8:06PM

My husband and I have £300 a month 'fun money' that we use for days out, 'one-off' purchases, home DIY, holidays, etc.
We have decided we would like to save £200 a month of this money to save to go to Australia (to visit friends & travel for 3 weeks) for our 20th wedding anniversary in 2022 - all being well.

I've obviously heard of ISAs but I've never had money 'spare' so don't know much about them. Even though I've been reading the MSE guide to ISAs but I can't find out if you can pay in on a monthly basis or only once in a lump sum when you open it.

We've used our monthly £300 to decorate our living room, buy a shed, go to the races, weekends away and 3 months ago booked a trip to Italy with Shearings Coaches but I'd like to move the £200 out of my (easily accessible) savings account each month to make it safer from us using it frivolously (but not totally locked away, just in case we have an emergency).

As I've not seen any information on monthly savings into ISAs I'm guessing not but hoping I've just missed it. TIA

eskbanker · 15 September 2019 at 11:30PM

Cash ISAs are generally pretty poor value for money, especially since the introduction of the personal savings allowance in April 2016 largely removed one of their remaining advantages over taxable accounts, so I wouldn't necessarily see those as the answer for you.

In your shoes I'd consider one or more regular savings accounts, which are specifically geared up to monthly contributions. You may also be able to benefit from interest-paying current accounts: https://www.moneysavingexpert.com/savings/which-saving-account/

Finally, if your signature is in any way accurate, worth considering debt repayment ahead of saving: https://www.moneysavingexpert.com/savings/pay-off-debts/

socks_uk · 16 September 2019 at 7:46PM

Thanks for your advice eskbanker.

I do get your point about paying off debt before saving but as the saving is for a specific reason and I should be debt free only 2 years later, I think I'd rather do the Australia trip before I'm 60.
Thankfully my debts aren't making me skint and I'm overpaying them out of my own money rather than our £300 'fun money'.

KonkyWonky · 18 September 2019 at 1:49PM

Would second opening a high interest regular saver, some of these pay up to 5% which is significantly more than a cash ISA does.

You may need to open a current account with the bank to give access to the regular saver. If that is the case and the bank is offering a cash incentive for new customers who switch their current account to them, consider opening a new current account with any bank and request that it is switched to the bank providing the switching incentive.

The main drawback of the regular saver account is that it only runs for a year, after that you should move the holdings to the highest interest rate current/saving account available and open another regular saver.

£200 a month savings - ISA?

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