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@bananaskid @skinny I agree. If I (we) aren't going to clear it, making voluntary contributions is such a waste.
I have unused maintenance loan and I'm in third year, I am thinking about taking about 2.4k in maintenance loan and putting £1200 into the first month into a help to buy ISA (2.5% AER then 25% on top of that if used on a house), and then the rest as £200 max contributions to the ISA until my first payday in October when I can continue to do it with my salary. Is that stupid?
Also I think the lifetime ISA and help to buy ISAs are different.
bobble-
Also I think the lifetime ISA and help to buy ISAs are different.
This is my understanding too.
My 2p the idea of trusting the government on something as long term as the lifetime ISA is niave. And over the term the gain seems minor.
The Help to Buy ISA doesn't alwsy work out when you look at the inside/near London caps and that it's priced into a lot of new builds (which I believe is still a stipulation). However, there is so little downside, if you can you may as well. If it works for you great, if it doesn't meh.
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I’d say that is a really good move. I had some spare money in my first year but I decided to be stupid and spend it away. I’d look at the Lifetime ISA. It seems it’s a lot easier to use and has a much higher limit (£4k). I’m using Nutmeg at the moment.
Also, I’d probably not put it all into one of these ISAs as it’s a pretty illiquid asset and try to keep some aside for rainy day(s).
hugo7
bananaskid
@bobble and @skinny I did a little research into this and decided probably the best thing to do before paying any extra back is to wait until I finally settle on the career path that I'm going to stick with.
Having done a 3-year degree I've got £43,000 debt which will be increasing at about ~7%. If I get a job that has the average starting salary (£22-30k depending upon source), and it were to increase close to RPI then by the end of 30 years I wouldn't come to remotely close to paying it back. I think the greatest uncertainty in this equation is your expected future income rather than inflation rates and returns on savings/investment that you do in lieu of paying back your student loan.
Additionally, for most recent students I'd recommend setting up a Lifetime ISA instead of paying back your student loan given a guaranteed 25% government bonus that you can use on a house deposit.