Saving Account
Discussion
Savings accounts are dire, the one linked above will net very little and even the £15 p.a. earned per £1000 invested will be taxed.
Premium bonds will likely also net you very little but it's not taxed, you'll kinda look forward to the draw each month, and albeit unlikely you may win a bigun.
Premium bonds will likely also net you very little but it's not taxed, you'll kinda look forward to the draw each month, and albeit unlikely you may win a bigun.
PositronicRay said:
Savings accounts are dire, the one linked above will net very little and even the £15 p.a. earned per £1000 invested will be taxed
Depends on his income tax band and how much interest he’s getting at the moment.If he’s a 20% taxpayer, he can earn £1000 a year in interest before he has to pay tax on it. £500 if he’s a 40% taxpayer and £0 if he’s a 45% taxpayer.
OP, do you have a Help to Buy ISA or Lifetime ISA? They’re where I would start
Hi OP,
i am currently about half way through my goal and at the start i didn't know where to start saving !
I opened a HTB ISA with the Full £1200.00, Do this if you can. See if you can put £2400 in before the end of the tax year.
I also have a HTB LISA. You can put more into this that a HTB ISA. £4k before end of tax year. You still get the same 20%/25% government contribution i think but can only use one of the bonuses. I play to move the HTB ISA money into a diff acc/S&S isa before i buy.
I also have a Stocks & Shares ISA, currently down slightly but this is the only way i could work out on how to save the most in right places.
Maybe i'm doing it all wrong and someone can help me!?
I use virgin for HTB isa and Nutmeg for LISA and S&S. Worth going on to the MSE forum too, some helpful people on there.
Good Luck
i am currently about half way through my goal and at the start i didn't know where to start saving !
I opened a HTB ISA with the Full £1200.00, Do this if you can. See if you can put £2400 in before the end of the tax year.
I also have a HTB LISA. You can put more into this that a HTB ISA. £4k before end of tax year. You still get the same 20%/25% government contribution i think but can only use one of the bonuses. I play to move the HTB ISA money into a diff acc/S&S isa before i buy.
I also have a Stocks & Shares ISA, currently down slightly but this is the only way i could work out on how to save the most in right places.
Maybe i'm doing it all wrong and someone can help me!?
I use virgin for HTB isa and Nutmeg for LISA and S&S. Worth going on to the MSE forum too, some helpful people on there.
Good Luck
Tumbler said:
Is 1.5% that attractive to people? Better putting it in a S+S ISA and buying some funds or bonds wouldn't it. Can go down as well as up, but at 1.5% you're still trailing the rate of inflation. Condi said:
Is 1.5% that attractive to people? Better putting it in a S+S ISA and buying some funds or bonds wouldn't it. Can go down as well as up, but at 1.5% you're still trailing the rate of inflation.
If you need the money back in a couple of years then 1.5% combined with that certainty is worth a lot more than the likelihood of beating inflation but a not insiginificant chance of getting back much less than you put in.Equities are somewhat attractive with a 5 year time horizon, and very attractive when you consider a decade or more. They're rather less attractive when it is only a few years until you need the money.
I wouldn't use Stocks and Shares to hold my money for that period. One incident or downturn and you're likely to miss your target. You'll probably get the money back eventually, but it may well take more than the time you have.
You haven't mentioned Help to Buy ISA or Lifetime ISA so I'll say the main points of these as I understand/remember them:
HtB ISA:
Pay in £1200 in the first calendar month. Can only pay in £200 per calendar month thereafter. You can claim the bonus (25% of what's in the account) once the balance reaches £1600. Maximum bonus is £3000.
Interest rates are quite good (2.5% with Virgin Money, up to 3% with some building societies)
You're free to make withdrawals without penalty. Can be used to buy a house worth up to £250,000 (or £450,000 in London)
Cash Lifetime ISA:
Pay in £4000 per tax year (therefore by the middle of April next year you could have paid £8000 into the account, attracting a bonus of £2000). Bonus is paid into the account without having to claim it and reaches a maximum of £33,000 (if you pay in the max every year from 18-49)
Needs to be open 12 months before you can use the bonus
If you withdraw cash for reasons other than buying a house or retiring, you'll lose 25%. This will be more than the bonus. Ie if you deposit £4000 and get 25% bonus, you have £5000. If you withdraw £5000 and get stung for 25% of that, it's £1250
Interest rates are around 1%
Basically you can see that they're both useful but your needs and circumstances will dictate which one is more useful to you. You can have both but can only claim the bonus on one and can't pay into two cash ISAs within the same tax year. You can't have a Help to Buy ISA if you have ever owned a home and you can't open a LISA if you're 40 or older.
You haven't mentioned Help to Buy ISA or Lifetime ISA so I'll say the main points of these as I understand/remember them:
HtB ISA:
Pay in £1200 in the first calendar month. Can only pay in £200 per calendar month thereafter. You can claim the bonus (25% of what's in the account) once the balance reaches £1600. Maximum bonus is £3000.
Interest rates are quite good (2.5% with Virgin Money, up to 3% with some building societies)
You're free to make withdrawals without penalty. Can be used to buy a house worth up to £250,000 (or £450,000 in London)
Cash Lifetime ISA:
Pay in £4000 per tax year (therefore by the middle of April next year you could have paid £8000 into the account, attracting a bonus of £2000). Bonus is paid into the account without having to claim it and reaches a maximum of £33,000 (if you pay in the max every year from 18-49)
Needs to be open 12 months before you can use the bonus
If you withdraw cash for reasons other than buying a house or retiring, you'll lose 25%. This will be more than the bonus. Ie if you deposit £4000 and get 25% bonus, you have £5000. If you withdraw £5000 and get stung for 25% of that, it's £1250
Interest rates are around 1%
Basically you can see that they're both useful but your needs and circumstances will dictate which one is more useful to you. You can have both but can only claim the bonus on one and can't pay into two cash ISAs within the same tax year. You can't have a Help to Buy ISA if you have ever owned a home and you can't open a LISA if you're 40 or older.
My daughter asked me the same question just over a year ago
I told her buy hur shares every month rather than go the lisa help to buy isa etc route but she wanted risk free.
Now if she asked the same question I'd tell her to buy i3e every month with an 18 month to 2 year time scale.
Dyor
I told her buy hur shares every month rather than go the lisa help to buy isa etc route but she wanted risk free.
Now if she asked the same question I'd tell her to buy i3e every month with an 18 month to 2 year time scale.
Dyor
OP - Assuming you are under 40 and a first time buyer:
If you had £15,000 today you would have £17,000 next year (a 13.34% return) before any interest payable.
- Put £4,000 into a Lifetime ISA straight away.
- Place the balance in an account with Marcus (tax treatment already explained above)
- On 6th April next year place a further £4,000 into your LISA
If you had £15,000 today you would have £17,000 next year (a 13.34% return) before any interest payable.
dingg said:
My daughter asked me the same question just over a year ago
I told her buy hur shares every month rather than go the lisa help to buy isa etc route but she wanted risk free.
Now if she asked the same question I'd tell her to buy i3e every month with an 18 month to 2 year time scale.
Dyor
You seem to be giving her very poor advice, given her objectives!!I told her buy hur shares every month rather than go the lisa help to buy isa etc route but she wanted risk free.
Now if she asked the same question I'd tell her to buy i3e every month with an 18 month to 2 year time scale.
Dyor
dingg said:
Checkout hur share price .
It was great advice and she'd have been quids in. As will the op if he does the same with i3e
(probably)????????
The point is that it’s a gamble. Stocks and shares can (and will) go down. If you’re saving for the short term, the market may not have time to recover your losses if that happens It was great advice and she'd have been quids in. As will the op if he does the same with i3e
(probably)????????
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