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Investing as a student – how I’m making the most of my inheritance and savings

HL client Felicity, shares her story into investing and how she made more from her savings and inheritance by using a Lifetime ISA.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

We recently spoke to Felicity, a student from Bristol, who opened a Lifetime ISA (LISA) and a Stocks and Shares ISA after receiving inheritance and wanting to make more from her savings. Felicity was previously saving into a Cash ISA and premium bonds. But she felt her money wasn’t growing in the way she wanted to help reach her long-term goals, like buying a house. She found she could do more with her money through investing.

Remember this article isn’t a recommendation or personal advice, it's showcasing Felicity’s personal journey into investing. If you’re not sure about investing or which investments to choose, ask for financial advice.

A photo of HL client Felicity

What did you think about investing before you started?

“I didn’t know very much about it. I knew you could invest in company shares, but I didn’t know anything about funds. I thought the typical investor was someone with a lot of money who wasn’t afraid to lose it all.”

Why did you start investing?

“When I turned 18, I opened a Cash ISA and put some savings into premium bonds. As a university student, I saw the occasional premium bond winnings as extra money to spend. I didn’t think about the fact that the overall value of my savings wasn’t growing much, or even going up in line with inflation.

After this, I was lucky enough to inherit some money from my great grandma. My mum suggested there were better long-term options for me than both the Cash ISA and premium bonds and so I started to research investing.”

How long have you been investing?

“About a year ago, I decided to invest some of the money left to me in a Lifetime ISA so I could save towards my own property.

When I leave university in a year or two, I know that I’ll have a large student loan to pay back. So knowing I’m putting money away towards a deposit for my own place one day is reassuring. I put the full annual allowance of £4,000 into it and the rest into a Stocks and Shares ISA.

When I received the £1,000 bonus paid in by the government, I actually thought there had been a mistake! In April 2021, I was able to transfer another £4,000 from my Stocks and Shares ISA and again I received a £1,000 bonus.”

A Lifetime ISA can be opened from 18 to 39 and can be used for later life or to purchase a first eligible property.

You can add to a LISA until you’re 50 and anything you add will form part of your overall ISA allowance. You get a 25% bonus from the government on money you pay into a LISA up to the £4,000 annual limit.

But if you choose to withdraw the money before 60 and the money doesn’t go towards a first property, you could be subject to a 25% withdrawal charge, so you could get back less than you put in.

More on Lifetime ISAs

What do you invest in and why?

“Mainly funds because in general they seem lower risk than individual shares as they’re spread out over lots of different companies.

I don’t consider that I have the money to be taking high risks and this type of investing doesn’t appeal to me. In the LISA, I invested in four different funds including an ESG fund.

I’m studying biological sciences at university and the environmental considerations were important to me and, I believe, will be important going forwards. I used HL research, like the Wealth Shortlist, to help me make my decisions.

In my Stocks and Shares ISA I invest in funds but I also did some research into companies that shared similar values to me, such as renewable and green energy, and decided to buy some shares too. Having read various bits of information online about sustainable companies to invest in, I identified a few of interest and then checked how they were performing over time on the HL website.”

Remember, past performance isn’t a guide to the future. All investments can fall as well as rise in value, so you could get back less than you invest.

What do you like about HL?

“The HL app is great, I use it to check my investments every now and then. I also used the main HL website to research and actually invest.”

What do you think could put off young people and women from investing?

“A lot of young people either don’t have the money to invest, or don’t realise you can start with a small amount and it’s still worthwhile. Some of my friends’ parents invest on their behalf, but I like to have responsibility for my own money – it will make it easier when I finish university. It’s hard to ask friends for advice about things to do with money because everyone’s situation is different, so you need to do the research yourself.”

How do you see investing now?

“I still wouldn’t invest in anything very risky. Sometimes I do worry about whether I’ve researched thoroughly enough and if the decisions I’ve made are good ones. But my savings are doing much better now they’re invested than they were in my Cash ISA or premium bonds.”

Top tips for people like you

“Go to a reputable site like HL and read the research. Don’t do anything drastic, think about investing in funds, and not just one, because this can reduce the risk. Opening a LISA is a good idea for young people to help towards a first property. You receive a £1,000 payment from the government each year if you save £4,000.”

What are your next steps?

“While I can, I’ll continue to feed money from my Stocks and Shares ISA to my LISA each year. Now my money’s invested, I’ll check it every now and then to see how it’s performing and if I need to adjust my investments. But on the whole, I’ll leave it alone.”

Feeling inspired?

We offer lots of different accounts suited to different people, including the Stocks and Shares ISA and Lifetime ISA that Felicity uses to make the most from her savings. To find out what account could be right for you, visit our compare accounts page.

Compare accounts

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Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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