- This is a Paid Partnership with Beehive Money -
You might already know from reading the renovation updates I’ve been sharing on my blog for the last year and a half that we bought our first home in September 2020 after selling my boyfriend’s flat. It’s not only been a labour of love but a huge financial investment which is what I wanted to cover more of today.
Saving with a Lifetime ISA
I want to share more information about the Beehive Money Homebuyer Lifetime ISA – a great savings account to help you save for a deposit on your first house faster. When we decided to buy our first home at the start of 2019 I didn’t think I’d be able to take advantage of a Lifetime ISA because we hoped to buy quicker than 12 months but in the end the pandemic hit and I would have had more time to take advantage of the bonus. If you do start saving then decide you need to withdraw the money before the end of the first 12 months there is a 25% government withdrawal fee.
A big advantage with a Homebuyer LISA is you'll get a 25% government bonus and tax-free interest. Meaning, if you put in the max £4,000 then you'll get a £1,000 bonus (for doing nothing other than setting aside your own money every month in the LISA).
All you need to open a LISA with Beehive Money as a first-time buyer is just £1 – you must be between 18 and 39 years old and you can pay in a maximum of £4,000 per tax year (every 6th April to 5th April).
A couple of other things to note:
- You can choose to leave your account open after using for your first home to save for retirement and withdraw at age 60.
- There’s also a 25% withdrawal fee if you use the money for anything other than your first home or retirement.
My Savings Tips
There is more than just your mortgage deposit to consider when buying your first home – especially if you buy a ‘fixer-upper’ like we did, just want to freshen things up a little or discover you need to buy whole rooms worth of furniture. So, I wanted to share some of the ways I set aside money every month to cover all the expenses.
1. The day before payday I move all my money into a second bank account that I don’t touch unless there is a bigger cost (hello new doors we ordered this month!) so I can only see my monthly wage for day-to-day spending. This stops me from seeing all my money and thinking I can treat myself…
2. My boyfriend and I pay roughly an extra £50 above our monthly outgoings (mortgage, bills, council tax etc) into our joint account. It doesn’t seem like a lot but this adds up and means there is always a little extra for unexpected bills or emergency repairs.
3. I’m not the type of person who has lots of Direct Debits going out every month, and I don’t believe you should have to do without all the luxuries in life to save for a deposit on a house but now could be a good time to draw a line in the sand and evaluate if you are really using everything you are paying for.
Personally, I find that a Netflix subscription is only worth it for me in the winter months, so I cancel it during summer saving £65 a year. 'Now' also do great offers on their Entertainment and Cinema plans so why not take advantage for the month and binge watch everything your interested in before cancelling again. Much cheaper than paying for every service, every month all year.
4. If you’re going to treat yourself to take away coffees or some online shopping make sure you're getting the most out of it. I have the Costa app on my phone so I get a free drink for every 8 I buy (which isn’t even weekly so that’s fine) and I have the Topcashback browser extension installed so I can see if there is extra money to be saved on all the essential (and not so essential) purchases I make.
So overall, I think if you’ve got over a year to save for a deposit on your first home you’ve got nothing to lose by opening a Homebuyer LISA with Beehive Money – especially if the government will give you an extra 25% for every penny you can set aside. The Beehive Money app is available to download on the App Store and on Google Play.
Hopefully the tips I’ve shared are something you’ll find useful – are you going to open a LISA?
Beehive Money is a trading name of Nottingham Building Society.
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