Savings could net savers enough for a deposit
With studies showing a house buying increasingly out of reach for many the average age of a first-time buyer is now as high as 38.
HMRC statistics showed that the average amount invested into a stocks and shares ISA is less than 60% of the whole allowance. The current ISA allowance is £10,680, so if an individual were to save 60% of that into a stocks and shares ISA for five years, assuming growth of 7% per annum of compound interest, they would have a total of £36,852.83 after five years.
Oliver Roylance-Smith, head of investment at Fair Investment Company, said: “Saving the full ISA allowance each year is unrealistic for most people. This calculation shows that even if you can’t afford to invest the full amount each year, and don’t benefit from market leading returns every step of the way, you can still build up a healthy fund.
“If the ultimate goal is being able to own a home, saving over a five year period seems like a reasonable time frame.”