Savings account i can forget about!

[Wingingitnancy]

I really need to save meticulously to prepare for couple years to aim to get on housing ladder. We have stable jobs in place and I'm currently going through qualifications alongside to improve role over next few years.

My landlord will be selling in next few years and I want to move to our own home rather then further renting.

So it's just down to deposit. I can save..issue is I always dip into it. Ahh big car bill, I'll just use a bit of that. Ah could do with this, I'll just nab a bit.

I need a DD going out on pay day automatically, to an account not on my main bank screen 😅 where it's not so easy to just take willy nilly.

What accounts would you suggest?

Something that is trickier to access with no app? Chetwood bank, Cynergy are 2 that are like this.

Would a drop in interest rate following x amount of withdrawals stop you from taking funds out? It would for me but it wouldn't affect others, there are a few of those on MSE savings best buys.

How much are you looking to save monthly? You can save up to £250pm with regular savers, you can't often withdraw from those until the year expires.

Premium Bonds is an easy one, but no guarantee of a % return.

Are you a first time buyer? If so then look at a LISA which is specifically for FTB deposits. Although max you can put in per year is 4k the government add 25% to your saving then you can get reasonable interest rate on top and it's tax free growth/interest.

Yes 250 was my idea of DD to hit my target. But aim to filter more in certain months. I feel anymore then 250 to start with could stretch to far.

www.moneysavingexpert.com/savings/lifetime-isas/

Have a look here for best rates 😉
https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/#banklinked

Leeds Building Society Home Deposit Saver:

https://www.leedsbuildingsociety.co.uk/savings/regular-saver/home-deposit-saver/

Doesn't have to be spent on buying a home but you do need to be a first time buyer to open the account. Pay in up to £500 per month and only one withdrawal a year allowed. Currently paying 5.05% interest.

As PPs have suggested, there are regular savings accounts that have good rates, but the monthly limit is usually about £250 and the term is 1 year, so you have to stay on top of them when they mature to avoid the money ending up in a low-interest easy access account.

In your position I wouldn't necessarily chase the highest interest rate, as your main motive is avoiding the temptation to withdraw money, rather than getting the most interest. Personally I'd be happy with anything over 4%, although if that happens to be an account paying 5% or 6%, that would be a bonus.

There are also savings accounts with a limited number of withdrawals permitted per year. Usually paying higher interest than completely easy-access accounts, but not as much as the highest paying regular-saving accounts.

If you are a first time buyer and you definitely want to use the money as a deposit the 25% uplift in the Lisa will beat any high street interest rate by a mile.

Eg 250 per month for 2 years with the uplift and 3.5% interest would give you a deposit of £7775. If you manage to put away the max of £4000 a year which is £333 per month you would have £10,366 after 2 years.

Kent Reliance has a savings account paying 4.56% interest. If you think you’ll be tempted to dip into your savings for “treats” and nice to have stuff rather than essentials, maybe go for an account where there will be a penalty for early withdrawal. There are also 2 year fixed interest accounts around paying similar interest, like this one https://www.kentreliance.co.uk/products/isas/two-year-fixed-rate-cash-isa
This guy does really good YouTube videos and podcasts, here’s an episode in savings https://meaningfulmoney.tv/2013/01/17/mmp005-how-to-start-saving-podcast/

Good point about a LISA from LivLuna, just bear in mind it imposes a ceiling in how much you can spend on a property so isn’t suitable if you are buying in London or the more expensive parts of the south east.

You say "we": is your partner more disciplined than you? Could you get them to look after the login details for you so you can't dip into the savings easily? Or give their phone number instead of yours for the two-factor authentication to log in?

I have a regular saver with Nationwide, if I make more than 3 withdrawals then the interest rate drops.

If you can lock some money away then a bond is the way to do that.

We use plum.

That Leeds BS first home saver account looks ideal, but you also need to look at your budget and think about how much you're able to save, prepare for annual and irregular expenses, set a reasonable amount for non essential purchases and move money for these into separate pots or accounts.

You mention dipping into your deposit savings for a 'big car bill' and something else that sounds non essential.

Obviously repairing your car (plus routine maintenance, insurance and saving for it's eventual replacement) is usually essential so you need money put aside for this, that's not part of your mortgage deposit and this could be a significant chunk of money - up to about £2/300 pm, or more depending on what money you have available and how much your insurance is. So you need to save that every month, then you have money available when you need to spend money on your car.

Then you need to set a reasonable amount for non essential spending - this would come after essentials and while you're saving for a deposit should be fairly modest as every pound you spend on stuff/experiences is a pound that you can't put towards buying a house. But the amount this is will depend on how much you need to save and how much spare money you have.

When you have decided an amount, you could transfer it to a separate 'spending' account and only use that account to pay for things like clothes, going out, work lunches (take packed lunches where possible, saves loads), grooming etc, to be spent on a 'when it's gone it's gone' basis.

I’m sure there are ISAs with months of warning required before you can withdraw so no quick decisions possible

I don't think I'd be classed as a first time buyer:/ i joint owned a home in my teens 😅

I think I've found the scenario where assets for children goes wrong 😅

Do you access on an app? I just going through all the different suggestions and this seems like it might benefit me as it appears to help keep you in that budget/save mindset? Also might help to keep me realistic month by month?

Hi OP

Yes it's an app, it's brilliant as I have it set up just to take a set amount, I can login and check keep some free for me to transfer back and then some is locked up and I add to it.

I've found it's great and have used it for about 2 years now.

I found the starling pockets were too easy to raid!!!

You might want to check out marygold (not the gloves!) marygoldandco.uk/ . They have a really simple product with loads of features to help you save. Two things you might like are (1) you can 'hide' your savings in piggy banks, and (2) if you really want to you can self-impose a 7-day withdrawal delay. We use it, it is just really easy to use.