This week my answers to your questions are all about savings.
I love hearing from you, whether it’s on the blog, social media, YouTube or on email. Often you’re asking me questions about your finances, and I’m always glad to help if I have the time.
But I realised that my answers could also be useful to other followers. So I’ll be putting my responses to the best questions into regular articles here on the blog.
Keep reading for some of the questions I’ve been asked, plus the video live from last week with even more!
Watch last week’s Q&A
How much should I save in cash?
How much do I need to save in cash?
Rhonatur, via Instagram
The general rule is to have cash to the value of three to six months of essential expenses easily available to you so that you’d be able to cover the bills and feed yourself if you lost your income in the short term.
Of course, based on the last year you might feel that you want access to more cash. You also need to factor in any other things you are saving for.
Beyond this you can look to lock savings away for longer periods, potentially in investments, your pension or by overpaying your mortgage.
Where should I save my £15,000?
Regular savers end
Hi. I currently pay the maximum into the top paying regular savers. I also have the Virgin Money current account and the Club Lloyds currently account. I also have LISA which i max out. I will shortly be receiving £5,000.00 and want to pay in £500.00 a month. Am I better off using my Virgin Money instant saver or opening a Halifax Reward account. It’s £15,000 in total. Thanks
Andrew, via Instagram
Hi Andrew
So £15k… I’d do £1k Virgin Money, £5k Club Lloyds and then filter to its regular saver, £9k Chip+1 or Premium Bonds!
I’d also open a Halifax Rewards but go for the £500 debit card payments rather than savings option. Here’s my guide to how it works.
Do we need the tax-free benefits with ISAs?
If you are a standard rate tax payer, is it true normal ISAs are of not much of a tax benefit.
Kian, via YouTube
Yes, that’s true. There’s something called the Personal Savings Allowance that means most of us can earn £1,000 in interest tax-free each year. When you consider you only need to save enough to cover emergencies and things you are saving for in cash it’s practically impossible to do that with savings rates as they are. Here’s more on the PSA.
How many regular savers do I need?
I have a Club Lloyds regular saver, Lloyds monthly saver, Halifax regular saver and Principality regular saver. I have another £500.00 a month to put away. Would you recommend the Coventry Building Society
Andrew, via YouTube
Right now the Coventry Building Society pays 1.05% which is better than other options – though it is variable so could fall in value. It’s a perfectly fine account for its purpose.
Can I use a LISA and normal ISA too?
I have a Lifetime ISA and a Help to Buy ISA, can I still take advantage of the traditional Cash and Stocks and Shares ISA’s too.
Giles, via YouTube
Yes, you can. There’s a limit of £4,000 a year you can put in the LISA and that comes out of the total £20,000 annual allowance. So there’s a max of £16k you can put in any combination of other ISAs.
When is the deadline for withdrawing from a Lifetime ISA with the lower penalty?
Andy, can providers IMPOSE A DEADLINE earlier than 5th April for LISA withdrawals at 20%?If we want the 20% penalty surely we have until 5 April as that is still in tax yr
Rebecca, via YouTube
I think this is down to Easter bank holidays, combined with the time it takes to process the withdraw as the penalty changes when the money is taken out, not when you ask for that to happen.
How to ask me questions
The best ways to get in touch is in the Andy Clever Cash Facebook community
Just post your question any time, or ask me live in my weekly Q&A each Thursday (which is also on Instagram).
You can also comment on individual blogposts and videos or ask me questions via these channels:
- Twitter @AndyCleverCash
- Instagram @AndyCleverCash
- Email Andy[at]BeCleverWithYourCash.com
I can’t promise I’ll be able to answer all questions but I’ll do my best.