20k in Santander, where next?

Uther · 5 Oct 2017 at 10:36

My son is just about to get to the magic 20k mark in his Santander account, which means he will be looking for somewhere else for the £500 a month he sticks in it. He'll still cycle the money through Santander to trigger the interest obviously, but what options does he have for the money now?
He's 20, lives at home, and will do for a while yet I think. No debts. Sorting out a pension through work.I don't think he wants to think to much about mortgages at the moment either.
Any (sensible) ideas?

Kemik · 5 Oct 2017 at 10:39

Good work!

I would suggest he reads this and uses this flowchart to show how he should manage his money.

VincentHanna · 5 Oct 2017 at 10:47

Blimey, he's doing alright at 20.

£1200 initial deposit and then £200 a month in a Help to buy ISA?

Uther · 5 Oct 2017 at 10:50

VincentHanna said:
Blimey, he's doing alright at 20.

£1200 initial deposit and then £200 a month in a Help to buy ISA?

Yep, whilst working for McD's too! I would suggest the ISA, but he seems to have zero interest in a mortgage.

Uther · 5 Oct 2017 at 10:50

Kemik said:
Good work!

I would suggest he reads this and uses this flowchart to show how he should manage his money.

Thanks Kemik, will have a read through that.

VincentHanna · 5 Oct 2017 at 10:53

Uther said:
Yep, whilst working for McD's too! I would suggest the ISA, but he seems to have zero interest in a mortgage.

Understand that, my Halifax HTB ISA pays 3.5% interest and I can take money out if I don't want to use it towards a mortgage.

dan958 · 5 Oct 2017 at 10:59

Look into getting a LISA https://www.gov.uk/lifetime-isa Even if he has 0 interest in a mortage now, who knows in 5 years?

VincentHanna · 5 Oct 2017 at 11:10

dan958 said:
Look into getting a LISA https://www.gov.uk/lifetime-isa Even if he has 0 interest in a mortage now, who knows in 5 years?

Good in practise, but nobody is offering CASH LISAs other than Skipton Building Society, and the interest rate is a rather naff 0.5%

Also if you take money out you pay a 25% penalty!

moogle · 5 Oct 2017 at 11:11

Open a new account with one of the other banks. Nationwide FlexDirect offers 5% on up to £2.5G but has a £1k a month min pay in.

FortuitousFluke · 5 Oct 2017 at 11:16

Stocks and shares ISA, or something like Funding Circle? Bit more risk but also a more interesting form of investment, he's got a good parachute afterall, now might be the time to start trying to make the future money work a bit harder.

Puzzled · 5 Oct 2017 at 11:18

Stick it all on red

Martynt74 · 5 Oct 2017 at 11:21

How about just a Stocks and Shares ISA? Stick the money into a diverse fund and just keep at that. I assume at 20 he should be comfortable with the slight risk.

Even better would be a Lifetime ISA with the above. Then you'd get the growth and the 25% government contribution. As above, even if he doesnt care about a mortgage now, he probably will in the future.

ubersonic · 5 Oct 2017 at 11:40

VincentHanna said:
Blimey, he's doing alright at 20.

Indeed

Random calc though, if he's accumulated £20k by saving £500 a month he's been doing it for 40 months, if he'd been buying Bitcoins he would have ~£200k by now

Rids · 5 Oct 2017 at 11:41

If he saving long term I'd say Stocks and Shares ISA is the way to go.

Jumper118 · 5 Oct 2017 at 11:59

Bitcoin in a few months it'll be back over $5000 a coin and he'll have 25-30k

kinobestew123 · 5 Oct 2017 at 12:02

Have a look at the Nationwide Flex Regular Saver (different to the FlexDirect mentioned above). Doesn't have any of the awkward pay in/direct debit requirements but only allows you to save a max of £250 a month. Pays 5%.

Scam · 5 Oct 2017 at 12:05

VincentHanna said:
Good in practise, but nobody is offering CASH LISAs other than Skipton Building Society, and the interest rate is a rather naff 0.5%

Also if you take money out you pay a 25% penalty!

If he's managed to hit 20k when he is only 20 then he is obviously good at saving. Anyone who doesn't own a property would be daft not to open a LISA right now. Who cares about the interest when you get a 25% bonus when you buy a house. Thats a free £1000 every year !

Assuming that's what he is saving for... ?

I don't know what Santander account he has but I would take out £4k and put it in the Skipton LISA straight away.

Fusion · 5 Oct 2017 at 12:17

Stocks and shares ISA, read up/tell him to read up as much as possible about long term investing. Starting at 20, there are huge opportunities when dividends compound, and many stocks are paying way above savings accounts in dividends on the FTSE 100.

I know you said he's not too interested in mortgages (who is at that age?), but there are strong incentives to take one on early, or at least save for a deposit. It's one of those things where once you take one on, you think "damn, just wish I'd have done this earlier!"

Scam · 5 Oct 2017 at 12:33

Fusion said:
I know you said he's not too interested in mortgages (who is at that age?), but there are strong incentives to take one on early, or at least save for a deposit. It's one of those things where once you take one on, you think "damn, just wish I'd have done this earlier!"

Yeah, to be honest.. the one thing that he could do to set himself up for life is to get on the property ladder early

*looks at rich babyboomers*

MrB · 5 Oct 2017 at 12:38

Uther said:
My son is just about to get to the magic 20k mark in his Santander account, which means he will be looking for somewhere else for the £500 a month he sticks in it. He'll still cycle the money through Santander to trigger the interest obviously, but what options does he have for the money now?
He's 20, lives at home, and will do for a while yet I think. No debts. Sorting out a pension through work.I don't think he wants to think to much about mortgages at the moment either.
Any (sensible) ideas?

You know you can have two Santander accounts, I think you need two direct debits for each, and would need to pay £500 from a non-Santander account into it every month.