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  • FIRST POST
    • NealeH1875
    • By NealeH1875 5th Jul 18, 1:25 PM
    • 7Posts
    • 0Thanks
    NealeH1875
    best way to save!?
    • #1
    • 5th Jul 18, 1:25 PM
    best way to save!? 5th Jul 18 at 1:25 PM
    hi all,
    just looking for some advice really..

    at the mo i save
    250.00 into standard bank savings accounts - this is used to pay for holidays/spending etc
    200.00 into htb isa. opened with the 1200 and have been regular saving since this yr.
    300.00 into stocks and shares isa. opened with 500 and have been saving 300 regularly since.

    my question is.. would i be better transferring the HTB isa to the HTB LISA? save the 4k a year instead of 2400? if i do this can i have a normal cash isa to save into too?
    or would it be better transferring the HTB ISA money to the nationwide scheme what they spilt so you can have that and a isa as well?

    thanks in advance
    NH
Page 1
    • Wildsound
    • By Wildsound 5th Jul 18, 2:25 PM
    • 59 Posts
    • 33 Thanks
    Wildsound
    • #2
    • 5th Jul 18, 2:25 PM
    • #2
    • 5th Jul 18, 2:25 PM
    Welcome to the forums.

    The main thing people need to do before saving is having a goal(s) and an idea of a timeframe. It sounds like you have a goal in mind (first property purchase) so if you are able to give me an idea of a timeframe, I can help you out a bit more. Also if you can let me know what the maximum amount you are able to save per month is, that will help also.

    I come across a lot of people who get confused with the HTB and Lifetime ISAs (in fairness, to the average Joe, they have been made overly complicated). As far as saving goes, there are a few tricks you can do to help get the most out of both.
    • NealeH1875
    • By NealeH1875 5th Jul 18, 3:15 PM
    • 7 Posts
    • 0 Thanks
    NealeH1875
    • #3
    • 5th Jul 18, 3:15 PM
    • #3
    • 5th Jul 18, 3:15 PM
    Hi Wildsound

    Thank you for your reply. at the moment it is 550.00 i am saving towards the 'house fund as such' i could probably push this to at least 750 - 1000. i put into my standard savings go towards other purchases etc. i am just really unsure on the best way of doing it. all your help and advise would be appreciated
    • Riff Raff
    • By Riff Raff 5th Jul 18, 3:18 PM
    • 23 Posts
    • 15 Thanks
    Riff Raff
    • #4
    • 5th Jul 18, 3:18 PM
    • #4
    • 5th Jul 18, 3:18 PM
    You can have a LISA and a Cash ISA.

    If you transfer from your HTB ISA to a LISA you can keep your HTB ISA open and use it as a Cash ISA - it may have a good interest rate even if you can't claim the bonus in addition to the LISA bonus.
    • NealeH1875
    • By NealeH1875 5th Jul 18, 3:28 PM
    • 7 Posts
    • 0 Thanks
    NealeH1875
    • #5
    • 5th Jul 18, 3:28 PM
    • #5
    • 5th Jul 18, 3:28 PM
    You can have a LISA and a Cash ISA.

    If you transfer from your HTB ISA to a LISA you can keep your HTB ISA open and use it as a Cash ISA - it may have a good interest rate even if you can't claim the bonus in addition to the LISA bonus.
    Originally posted by Riff Raff
    would that be the best thing you rekon? transfer to a LISA, i am with nutmeg for my S&S isa, i can use them? and then can i re open the HTB isa with the 1200.00 or just open with 200.00 ?
    • Wildsound
    • By Wildsound 5th Jul 18, 3:46 PM
    • 59 Posts
    • 33 Thanks
    Wildsound
    • #6
    • 5th Jul 18, 3:46 PM
    • #6
    • 5th Jul 18, 3:46 PM
    at the moment it is 550.00 i am saving towards the 'house fund as such' i could probably push this to at least 750 - 1000. i put into my standard savings go towards other purchases etc. i am just really unsure on the best way of doing it. all your help and advise would be appreciated
    Originally posted by NealeH1875
    All depends on your timeline on buying. If you think this is unlikely to be in the next year or two, then I would consider the following points and ideas:

    - HTB ISAs generally have the best interest rates on the market, and whilst you contribute monthly, they aren't the typical monthly saver which you can get on the high street, as these generally mature after a year and you then start again. Over a longer time period, you have the benefit of compounding as it accumulates higher and higher.

    - You have until the beginning of April 2019 to contribute to a Lifetime ISA (max 4k) to gain the government bonus (up to 1k or 25%) in time for the end of this tax year. The bonus is paid (almost) straight away, whereas the bonus for the HTB ISA is paid on completion, so it will be able to start earning interest straight away

    - What I would do is continue to contribute to your HTB ISA, thus gaining benefit of the relatively higher interest rate compared to standard savings
    - Contribute to a high interest monthly saver or two (e.g. Nationwide 5% up to 250 per month). After a year and it matures, dump the money into the LISA utilising your 4k annual LISA allowance (it would be difficult to start now in time for end of tax year, but you can get the ball rolling for next year)
    - In total, you would contribute 2,400 to your HTB and 4,000 to your LISA per year.
    - If the house purchase is likely to be in 3-5+ years time, then consider investing in a stocks and shares LISA to be able to chase potential better returns (you may lose more than you started with though)
    - If the house purchase is less than that, open a cash LISA (currently only Skipton building society, however Nottingham BS is due to launch one this year, likely with a better interest rate)

    When you eventually come to buying a property, you would close down the HTB ISA (with no penalty to do so) and pocketing the interest. You would then use the LISA towards the purchase with no penalty and the government bonus already in hand. (Reason - you can only use EITHER the HTB ISA or the LISA, not both) As the LISA gives you better buying options (any property up to 450k inside AND outside of London) it is far superior when it comes to buying a property.

    (note - if you withdraw any money from the LISA that is NOT towards either a first house purchase or after the age of 60, there is a 25% penalty on withdrawing the money once the government bonus is taken into account (equates to about 6.25% penalty once bonus factored in))
    Last edited by Wildsound; 05-07-2018 at 3:57 PM. Reason: additional info
    • NealeH1875
    • By NealeH1875 5th Jul 18, 4:50 PM
    • 7 Posts
    • 0 Thanks
    NealeH1875
    • #7
    • 5th Jul 18, 4:50 PM
    • #7
    • 5th Jul 18, 4:50 PM
    Thanks Wildsound, what would your advise be to buy within 2 years? sorry i forgot to put that above
    • Wildsound
    • By Wildsound 5th Jul 18, 4:53 PM
    • 59 Posts
    • 33 Thanks
    Wildsound
    • #8
    • 5th Jul 18, 4:53 PM
    • #8
    • 5th Jul 18, 4:53 PM
    Thanks Wildsound, what would your advise be to buy within 2 years? sorry i forgot to put that above
    Originally posted by NealeH1875
    A cash LISA as 2 years is too short a time for stocks and shares generally
    • NealeH1875
    • By NealeH1875 5th Jul 18, 5:00 PM
    • 7 Posts
    • 0 Thanks
    NealeH1875
    • #9
    • 5th Jul 18, 5:00 PM
    • #9
    • 5th Jul 18, 5:00 PM
    Thank you..

    so move what i have in HTB and S&S currently to the LISA ?
    Keep the LISA just as another saving option and also open a higher end savings acc? do i need a current account with them to have one?
    • NealeH1875
    • By NealeH1875 5th Jul 18, 5:12 PM
    • 7 Posts
    • 0 Thanks
    NealeH1875
    if i took money out of my HTB ISA, can we essentially put the opening 1200 into it or is it just carrying on the 200 a month
    • Wildsound
    • By Wildsound 5th Jul 18, 6:10 PM
    • 59 Posts
    • 33 Thanks
    Wildsound
    Ideally, if you can avoid it, don't transfer the HTB ISA into the LISA. Keep contributing to the HTB and then open a LISA and contribute the full amount before April. However, if before April 2019 you aren't able to independently contribute 4,000 to the LISA, make sure the LISA gets the full top up.

    The 5% monthly savers that come with banks/BS generally require you to have a current account with them.

    Using Nationwide as an example (other banks/BS are available), I would do something along the lines of the following:

    - Open a Flexdirect account and keep a balance of 2,500 to benefit from the 5% interest on the current account (if you have a friend with an account, they can refer you and you both get 100 each)
    - Open a Monthly saver (5% interest) and start contributing monthly by 250 per month
    - Keep contributing to your HTB ISA 200 per month
    - Contribute 4,000 to a LISA (if possible) or open one now and start drip feeding as best you can into it
    - If by March (giving you some leeway) you haven't contributed fully to the LISA, look to maximise it the best you can.
    - When your 5% monthly saver matures, put it straight into the LISA (next tax year) and open a new monthly saver
    - repeat process

    Hope this helps and makes sense now


    p.s. if you did go down the Nationwide route, make sure you read the T&Cs of the products - there are some good guides on these forums and at the top on what to do.
    Last edited by Wildsound; 06-07-2018 at 10:18 AM. Reason: additional info - plus removal of referral
    • NealeH1875
    • By NealeH1875 6th Jul 18, 9:25 AM
    • 7 Posts
    • 0 Thanks
    NealeH1875
    Hi Wildsound,

    thank you so much, i have opened the LISA this morning and worked out what i need to do to get to 4k by end of march.

    in regards to nationwide, i have only just moved to TSB with the switch incentive. are you aware on a minimum time you have to stay there before switching again?
    • MallyGirl
    • By MallyGirl 6th Jul 18, 9:57 AM
    • 2,809 Posts
    • 7,818 Thanks
    MallyGirl
    p.s. if you did go down the Nationwide route, make sure you read the T&Cs of the products - there are some good guides on these forums and at the top on what to do. If you don't have anyone to refer a friend you, PM me and I can sort you out. Go to your friends first though!
    Originally posted by Wildsound
    No solicitation of referrals are allowed on here. There is a referrals board for that.
    Thanks

    https://forums.moneysavingexpert.com/forumdisplay.php?f=42
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    • Wildsound
    • By Wildsound 6th Jul 18, 10:21 AM
    • 59 Posts
    • 33 Thanks
    Wildsound
    Apologies MallyGirl, I have edited and removed.

    @Neale - I am not sure or familiar with the TSB incentive, you would have to read the T&Cs of the switch with TSB.
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