18y/o, £35k salary, living with parents - savings advice

[fl_gentleman]

Hi all,

I'm about to start my first job post A Levels with a salary of 35k/year. The job is hybrid so I'll be living at home with my parents. They will be charging me about £300-500 per month rent, everything included. I am contributing 5% of my salary to my pension and my employer is contributing another 6%.

Ideally, I'd like to buy a house within the next few years, so should I be looking to open a LISA? And would a cash LISA be more appropriate? I don't spend much on myself so I could probably save around £20k/year give or take.

I would really appreciate any advice regarding savings accounts and ISAs - I know Chip offer a 4.84% instant access saving account. I already have a S&S ISA with about £3k in it. How should I allocate funds?

Thank you for reading and for any help. Cheers.

 

[silvereyes]

@fl_gentleman I would say max out and invest the LISA. Take the risk, it’s only 10k in total capital if your saying 2 years. It’s not like the market is going to tank so much you’ll lose 50%. I’m sure a minor loss wouldn’t break you but a gain would be even better

 

[fl_gentleman]

@silvereyes I think it's more likely to be 3-4 years - is the advice >5 years go for S&S LISA?

 

[laestadian05]

@fl_gentleman What is your goal? If you’re looking at buy a house/flat over £450k then you need to take the LISA off the table. I’d probably go pretty heavy into a stocks and shares ISA if I was you.

 

[cappylr]

@laestadian05 OP's salary would only afford them a 215k property with a 40k deposit.

 

[laestadian05]

@cappylr Right. But they will probably be looking at buying in a few years when they have a nice deposit and a far bigger salary.

 

[fl_gentleman]

@laestadian05 Yes, I reckon so. Most likely won't be over £450k, so in the meantime, max out LISA and put the rest in a S&S ISA? Should I also have a smaller amount in an instant access savings account?

 

[laestadian05]

@fl_gentleman Something like that. I’d keep £3-5k easily available for a rainy day, max out the LISA and put the rest into S&S isa. Also try optimise your pension contributions. Take full advantage of whatever your employer will match. I’ve even heard of people putting 8% into a pension and employers topping it up to 24% total.

 

[fl_gentleman]

@laestadian05 I've set it at 5% for now, with my employer contributing 6% but this is the highest they go.

 

[laestadian05]

@fl_gentleman That sounds good. you'll probably only need to review that as you change tax bands and/or employers.

 

[fl_gentleman]

@laestadian05 Thank you for the help!

 

[cappylr]

@laestadian05 Yeah, the 40k is what I factored in as a deposit based on OP saying they can save 20k a year.

I highly doubt OP is going to jump from 35k to around 90k in 2 years.

 

[laestadian05]

@cappylr I guess I was more thinking they would be looking a few more years down the line at a more expensive property

 

[gacu]

@fl_gentleman £300-£500 a month for digs?

I missed the boat with my kids.

 

[fl_gentleman]

@gacu Oh my dad is loving it for sure.