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Student ISA help.
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Lawpf2001
Posts: 177 Forumite
I currently have £3500+ placed within a Barclays ISA. I have just received my student loan (£1,176) that will be used to pay my accommodation on 22nd Jan.
Between now and the payment date I was looking to invest the loan plus what I already have either in the same or a new possibly higher rate ISA. I was discussing this with my Dad who said that as a student I would not be charged tax so I would not necessarily need my money in an ISA. Is this true as I thought as a student I would be liable for tax on interest.
Secondly, what accounts would people recommend to me? I would require some sort of access as I do dip into these funds every so often to pay accommodation as well as other expenses. So far I have only used £1,900 of allowance this tax year.
Thanks
Lawpf2001
Between now and the payment date I was looking to invest the loan plus what I already have either in the same or a new possibly higher rate ISA. I was discussing this with my Dad who said that as a student I would not be charged tax so I would not necessarily need my money in an ISA. Is this true as I thought as a student I would be liable for tax on interest.
Secondly, what accounts would people recommend to me? I would require some sort of access as I do dip into these funds every so often to pay accommodation as well as other expenses. So far I have only used £1,900 of allowance this tax year.
Thanks
Lawpf2001
0
Comments
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Between now and the payment date I was looking to invest the loan plus what I already have either in the same or a new possibly higher rate ISA.
If the ISA is not for this tax year you can open a new ISA. If it is for this tax year you can pay more into it up to £5100.I was discussing this with my Dad who said that as a student I would not be charged tax so I would not necessarily need my money in an ISA. Is this true as I thought as a student I would be liable for tax on interest.
Students are liable for tax in the same way as anyone else. You have a personal allowance of £6475. If you earn less than this then you are not a taxpayer so would be able to ask for gross interest to be paid.0 -
Everyone is liable for tax if they earn over £6475, doesn't matter if you are a student or not.
If you have used some of your allowance this year you have to stick with that ISA and not open another one. You can transfer it though, I imagine the Barclays ISA is paying a pretty poor rate. So you could transfer the ISA to another provider and use that for the rest of your allowance.0 -
Cool that answers a few questions but prompts a couple more. As i'm not working and am therefore applicable for gross interest would a regular savings accounts pay better than an ISA? Or now that the money is in an ISA keep it there and just transfer it to a higher paying account?0
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Yes a regular savings account would be good if you can give X amount every month for 12 months without withdrawals. Which I don't believe you can do unless you can pay your rent other ways
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Am I right in thinking that the ISA could be worth it in the long run though, as it will continue to be interest-free when OP starts earning over the tax threshold?0
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Am I right in thinking that the ISA could be worth it in the long run though, as it will continue to be interest-free when OP starts earning over the tax threshold?
Yeah I was thinking that this was probably the best option. I guess every year i'll just shop around and see where I can switch too.0 -
Yeah I was thinking that this was probably the best option. I guess every year i'll just shop around and see where I can switch too.
make sure you do switch every year (or whenever the bonus rate ends). that way, you can maximise your interest.
indeed, i have opened a new isa every year for the past few years. i transfer the money when the interest rate plummets down. but transferring can have its difficulties sometimes.
read this article for more info: http://www.moneysavingexpert.com/savings/best-cash-isa:grouphug:
Official MSE canny forumite and HUKD VIP badge member :grouphug:0 -
You've just prompted me to have a look around again. The whole transferring puts me off changing though. I worked at a well known high street Building Society and the problems customers with transferring ISA's to us was just silly.0
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You've just prompted me to have a look around again. The whole transferring puts me off changing though. I worked at a well known high street Building Society and the problems customers with transferring ISA's to us was just silly.
That's what I thought, but when I saw 3% had gone down to 0.8% then it had to be done!
Filling in the forms is the easy bit, what happens after that is the difficult bit.
Chances are that you will not encounter any problems. But if you do, as I did, then you have to start ringing up both you existing and current ISA providers. I found myself doing all the detective work. In all, I probably spent about an hour or two ringing the providers and the fault was with my current provider.
After the problem was sorted, I put in a complaint (over the phone). They back-dated all the interest that I had lost and posted me a cheque for £50!
Not bad for 2 hours work.:grouphug: Official MSE canny forumite and HUKD VIP badge member :grouphug:0 -
That £50 could pay a rail fine
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