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Husband's bonus - how do we make it work hardest for us?

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Hi,

My husband has just received a substantial bonus which is currently sitting in our offset account doing nothing. I really want to know what is the best option for it. I already think I will put £6k into 2 ISA's. I currently don't work and we have a 20mth child, is there any benefit in putting savings in our names?

I will be starting a business in a couple of months, so if I then start to pay tax will this affect the savings?

Comments

  • lindabea
    lindabea Posts: 1,530 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    bellyjm wrote:
    Hi,

    My husband has just received a substantial bonus which is currently sitting in our offset account doing nothing. I really want to know what is the best option for it. I already think I will put £6k into 2 ISA's. I currently don't work and we have a 20mth child, is there any benefit in putting savings in our names?

    I will be starting a business in a couple of months, so if I then start to pay tax will this affect the savings?

    You do not say if you would need the money at short notice. If you do, then your best option would be to save in a high interest account. Look for a rate of around 5%.

    While you and your husband are not working, you could elect to receive your interest gross. Ask the bank to give you an R85 form to complete. When you start your business, this could affect your tax on the interest. However, if your husband is now retired, you will be better off to put the accounts in his name as he will then be able to receive gross interest - at least upto his tax allowance.

    Your decisions will depend on the amount, how long you want to invest and if your husband will be working. With regard to ISAs, put 6000.00 now in your both names and then you will be able to put anothet 6000 after 5th April. That's 12000 in ISA.

    Good luck with your business.
    Before doing something... do nothing
  • innovate
    innovate Posts: 16,217 Forumite
    10,000 Posts Combo Breaker
    Assuming that the offset had a balance larger than the bonus at the time the bonus was paid in: the bonus does reduce the offset amount, and therefore the interest you pay on it. The "interest" you get this way from the bonus is tax-free.

    You would need to calculate the exact numbers to be able to say whether leaving the bonus in the offset or taking out ISAs / other savings accounts would be the better choice.
  • Deemy
    Deemy Posts: 3,683 Forumite
    YOU could put another £8k in two shares isa's now (self select) and then say £6k into cash isa in April and another £8k in shares isa's

    So thats a total of £28k.
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