20k for 7 Years- where?

testertrev

Due to have an endowment (20k) mature in March (on target woohoo!) and am looking for some suggestions as to where to put this to earn as much interest as possible before the fixed rate on the mortgage ends in 2016. For background, I am a 40% taxpayer, my wife does not work and is in receipt of DLA and a small ill health NHS pension. I assume it will be beneficial to put it all in her name to reap the maximum tax benefit. We have not used any ISA allowances at all. Any thoughts?

anselld

Firstly, follow the savings guide on this site

Using ISA allowance is normally first step - if you both take ISAs for £3600 before end March and then again after April 5th that will get £14400 quickly into tax free.

The rest in the meantime saved in your wife's name eg Tesco 6%

ISA rates are not looking too good right now, but personally I would not pass up the chance to use up the allowances - I wouldn't take a long fix though in the hope to move to a better rate next year.

The rest of the money (5600) can stay in the best instant access for another year then move into ISA in Apr 2010. Alternatively if you can bear the hassle take a couple of regular saver accounts for a year and drip feed from the Tesco account. Details all on the website.

Pick best rates via Moneysupermarket.com etc.

Having said all that, if your wife is entirely a non taxpayer and is never likely to be during the time in question just take the best rate account in her name and make sure you submit a R85 form to get the interest tax free.

My opinions only and does not constitute financial advice.
Good luck.