Temporary house fund savings

[Mirrorchoc]

If you had £150k from a house sale, you didn't need to buy a house immediately but maybe in the next 12-18 months where would you put it?
I'm thinking max out £20k cash Isa this year and then put £12k in cash Isa in April and £8k into stocks and shares due to the change in thresholds for cash isas. Then £50k into premium bonds. That leaves £60k to put somewhere. I could put it into normal savings account but worried that'll take me over the personal allowance for savings interest, which I wouldn't mind if they took the tax before paying the interest but it looks like hmrc adjust the following years tax code and I could end up buying a house with the savings and having higher deductions from my wages later

Only use S and S ISA if you are prepared to lose money. Normally allow at least five years to smooth the ups and downs.
Id just go for a high interest savings account and pay the interest to HMRC rather than risk capital in these very uncertain times.

You do have the option to just pay the tax. You will get a letter saying what you owe. It's only if you decide not to pay outright that they adjust your tax code

If you have £60k in savings for a year, and you're a higher rate tax payer, interest on about £50k will be taxable. Say you earn 4.5% interest for a year, that's about £2250 of interest and about £900 of tax, or about £75 a month over a year.

I doubt your finances be so tight that you can't just pay the extra tax as PAYE, given that you'll be buying with a £150k deposit, because if they were, you'd probably not be accepted for a mortgage.

But if you're worried, you could keep back money to pay the tax, you'll want some free cash as an emergency fund anyway and mortgage borrowing at worst is usually only slightly more expensive than savings, and likely cheaper over time than investments, so it doesn't make sense to use all your money for the deposit anyway.