A Congratulations. You have saved a substantial amount of money already and an extra £100 a month will soon build up your pot. I understand why you don’t want to put your money into anything risky, as you have worked so hard to save it.
Also the time frame of a couple of years is too short for stock market investment unless you intend to actively trade. So that leaves cash savings accounts. With inflation finally back at 2 per cent, the chances are the Bank of England will lower the base rate later this summer so you need to act fast to secure the best fixed rates.
You have a number of options. The best I would suggest is a lifetime Isa, which grows your money tax-free. If you already have an Isa, then you could look at two accounts – one for your lump sum and another for your regular savings.
A Lifetime Isa (Lisa) lets you save up to £4,000 a year tax- free and the government will match up to 25 per cent of your savings – so if you save the full £4,000 it will top it up by £1,000. You can use the money to buy your first house or take the money once you hit 60. There are a few rules governing the accounts, which you can find at www.
gov.uk/lifetime-isa. You need to wait at least 12 months after making your first Lisa payment before you can use it to purchase a property.
The best Lisa rate is the Moneybox Lifetime Isa, run through an app, which pays 5 per cent. The rate includes a 1 per cent bonus for the first year. Also app-based is Tembo, which is paying 4.
3 pe.
