If you had £20k to invest.....

[sadtoday1]

... what would you do?

Already earmarked £4k for LISA
Possibly another £4k to LISA after 6th April?
What would you do with the remaining £12k?

Already putting £200pm into a Help to Buy ISA

How long are you planning to invest it for?

Probably 4-5 years. Until house purchase possible.

I'd find a cash ISA with a decent fixed interest rate and leave it there. Virgin Money are doing 4.1% fixed for 2 years.

Fixed rate ISA would be my suggestion too.

Look at short term and long term goals.

Long term - Pension. You get tax relief on your contribution, so a 25% uplift but it isn't accessible.

Short term - LISA for home deposit, S&S ISA for money that may be needed in 5-10 years time. Cash savings products for money needed sooner. Instant access savings for an emergency fund.

What is the plan with the H2B ISA and LISA. You cannot use both to buy a first property. The H2B could be cashed out at some point and then used towards property purchase costs and the LISA towards the deposit.

H2B ISA may have a good rate on it, so may be better than using a Cash ISA.

Timeline when you would be using these accounts. Could both be used to help towards a home purchase even if you only get the bonus from one.

I think you are possibly asking two questions. ‘What vehicle should I use to invest’ (ISA, pension etc) and ‘how should I invest it’ (cash, stock market, etc).

Both are important but different from each other.

I would suggest that you choose a vehicle that minimises tax, which obviously an ISA does, also a pension. How important this is depends on how much tax you would pay if it wasn’t in such a vehicle.

Then you need to consider what investment. Any money you think you will need within 4 years or so should probably be in cash. If it is for much longer term it should possibly be in shares, as long as you have cash for shorter term needs.

This advice is for a 21 year old student that has come into some money. He has had a HTB ISA for about three years (before they were scrapped). He doesn't need to close this at the moment, so will probably keep this going at £200pm, and the cash used without expectation of the government bonus. Not sure what interest rate he is getting - it's with Nationwide.

Obviously the LISA is much better for getting the 25% bonus as he won't be needing the money for a house purchase for at least 4-5 years, so the value of the LISA will outstrip HTB .

He's not thinking pensions at this stage. All available cash will likely be invested into his first property to max out his deposit.

He doesn't need cash for day to day. He's got a p/t job that covers his expenses and holidays etc.