With the cost-of-living soaring, it’s now harder than ever before for first-time buyers to save up a deposit and get on the property ladder.
So, what tips could you pass on to the younger generation to build up those all-important savings?
- The earlier, the better
Getting started as early as possible is key to building up sufficient savings. Not only will you have longer to build up the amount you need but, with interest rates on the rise, your money will have more opportunity to gain in value. If you can afford to, locking away some of your savings in perhaps a fixed savings account can get you a higher interest rate in return.
- Draw up a budget
With energy bills and the cost of everyday items rising, you may think you have nothing left to save at the end of the month. But take a closer look. Are there any non-essential costs you could drop to leave you with some money left over at the end of the month, however small the amount? From swapping out branded products for supermarket brands, to cutting out the odd takeaway coffee, every little helps.
- Open a Lifetime ISA
While the Help to Buy ISA is a thing of the past, a Lifetime ISA offers savers the opportunity to earn a 25% government bonus on their contributions (up to £4,000 per year). A word of warning: withdrawing your funds for any reason other than buying a house (or turning 60) will incur a hefty penalty of 25%. Conditions and eligibility criteria apply.
- Move back home
This last one won’t be an option for everyone but making arrangements to move back home for a set period will allow you to build up funds that would otherwise be spent on renting. If someone in your family needs help optimising their spending and building up a deposit as quickly as possible – just get in touch.
🚨Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
🚨 Data accurate as of the date of publication – 10.06.2022.
🚨 The above material is for informational purposes only and does not constitute a sales offer or financial advice. Before taking out any insurance, credit agreement or other financial product, you should obtain individual advice on your requirements and the general terms of the contract.
Source: Quilter Financial Planning – Essentially Mortgages Q2 2022
