Oh boy do i need help!

franney

Hi there,
I do hope this is in the right place!
I have a divorce settlement heading my way and no idea what to do with it!
I will have £10,000 to put away for a rainy day and £5,000 as a general "fund" that i woud like access to without having to give notice. Or maybe even a third account that i could transfer an amount each month, just a thought lol
I'm not working at the moment so does that mean i qualify as a non-tax payer? If so does this mean i needn't invest in an ISA? It also means i don't have a regular income so i can't take advantage of the high rate savings accounts with halifax etc
What can i do with my money to earn as much from it as i can without doing anything to jeopardise it, as it were ie. no high risky business for me lol
I would really appreciate any help you guys can offer me, I've been reading through posts but i'm just confusing myself! I have absolutely no idea when it comes to money, i haven't even had a bank account for the past 7 years lol

Milarky

'Not working' does not qualify you as a 'non-taxpayer' unless all other income you receive is either not taxed or comes to less than your personal allowance for the year. If you register your savings accounts for 'gross' interest just because these are your circumstances at present, then if you take a job later in the same year you could end up owing tax from the savings depending on how quickly you earn. However, the good news is that you may 'chop and change' [register and unregister for gross interest] as often as you like - the tax will/won't get paid whenever the interest comes out. And , even if you paid tax and later decide that you shouldn't have done so, you can still ask for this to be refunded by the bank/building soc before the end of the tax year.

Where your income from investments takes you just into tax then you must register all your accounts for deduction of tax. This can be a pain also since you must then wait until the end of the tax year to reclaim the effect of the 10% tax band. However this cannot be avoided.

National Savings [run for the government] is unique in that they do not deduct tax at source like everyone else is meant to. Instead the income from NS&I accounts is either tax exempt or must be reported by you on a tax return after the year has ended [One would think that the government's own savings bank could at least collect the tax for them - but apparently not!]

Most of the good accounts require a bank account too - if only to approve any application you make.

Off the top of my head what about Halifax Websaver with card [for ATM withdrawals]? You mentioned Halifax so I assume you are already looking at them.

Good Luck

 

franney

Thanks for the reply
To clarify not working - I'm a "housewife" (albeit a very bad one) and i have no income of my own at all.

Most of the good accounts require a bank account too - if only to approve any application you make.

Off the top of my head what about Halifax Websaver with card [for ATM withdrawals]? You mentioned Halifax so I assume you are already looking at them.

I have just opened an account at Nationwide (thought i was walking into Abbey, was too late to walk out again lol) just so i have somewhere to put the money if when i get it
I did have half an eye on the Halifax web-saver for the smaller amount as it has quite a good interest rate, obviously i'd prefer the regular saver if there's a way to work it but it all sounds a bit technical to me - dripfeeding and all that!
thanks again

deemy2004

benefits such as income support count as taxable income. So if its less than 4745 per tax year than you should register as a non tax payer

Walletwatch

What can i do with my money to earn as much from it as i can without doing anything to jeopardise it, as it were ie. no high risky business for me lol
I would really appreciate any help you guys can offer me, I've been reading through posts but i'm just confusing myself! I have absolutely no idea when it comes to money, i haven't even had a bank account for the past 7 years lol

I would venture an opinion, but before that, some questions come to mind:

What proportion of your total amount are you willing to put away for a slightly longer period say 2-3 years?

Do you own a house? If not, do you intend getting into the market for one sometime in the near future? If yes, when?

Do you have any debts outstanding?

Of course, even after these responses, quite a lot would depend on the imminent inflow you're expecting.

Ta

franney

Deemy - i don't receive any benefits, i have NO income.

Walletwatch -

What proportion of your total amount are you willing to put away for a slightly longer period say 2-3 years?

The £10,000 is purely for saving, i don't want to touch it for as long as possible really

Do you own a house? If not, do you intend getting into the market for one sometime in the near future? If yes, when?

Do you have any debts outstanding?

No and No
Oh, and another no

Of course, even after these responses, quite a lot would depend on the imminent inflow you're expecting.

I don't have any expectations really, i just don't want it to sit in a bank doing nothing when i know i can make a bit of money from it.
I have never had any amount of money like this and the thought scares me that i will just waste it!
Thanks for the input, it's appreciated

juliesutcliffe

Hi Franney,
Don't worry about everything being confusing at the moment. It all comes together in the end and you're in exactly the right place with all this lovely advice. I'm also a (bad) housewife. Spend too much of my time on this chat forum!

What I would do (and of course I might be completely wrong) is to put your £10,000 into a high interest account (can't advise you on which one i'm afraid but look on the website under savings and investments)and set up a standing order into the Halifax Regular Saver at 7.07% for the maximum amount your allowed which is £250 a month. At the end of the year they will transfer it to an account you have opened with them, probably the Halifax Web Saver, which might be a good place to put your other £5000 as it is high interest and easy access.

By then you might want to transfer the amount into a cash ISA. Does that make sense. It is really easy to open the accounts for the Halifax. I know cos i've just done it, as long as you have a branch near you.

Lopk at Martins advice on his saving fountain. It is really good. Hope this helps

Walletwatch

To add to Julie's ideas, you can also open an Abbey Regular saver, and use the £10000 corpus to drip-feed both the Halifax and Abbey regular savers (to the max of 250 and 500 per month) This would mean that at the end of one year, you'd get a lump sum of £9000 plus the interest at a healthy 7%.

This can all get confusing, so here's the plot:

1. Open an egg account and put in £10000 there. This will earn you 5.5% for the first six months (0.75% over the Bank of England rate), and then on it will be at least equal to the Bank of England rate (currently 4.75%)

2. Open Abbey and Halifax regular savers and set up standing orders from the above egg account to fund these accounts monthly for £500 and £250 respectively.

3. Open a couple of other accounts with Abbey or Halifax, one an e-saver that will earn interest in the range of 5%, and another which will give you a debit / ATM card. The £5000 which you want access to without notice can sit in the Websaver earning interest at 5%, and when you want access to it, all you need is transfer it through the Internet or the phone to the second account and use your card to withdraw it.

deemy2004

Deemy - i don't receive any benefits, i have NO income.

)

You must be getting some income, as others have metioned maintenance from your husband is counted as income.

If it is truly 0, you should pop down to the DSS office as your probably entitled to soemthing in the region of £600 per month ! substantially more than you will earn from the £10k per month, so maybe wise to ahem spend the money down to £3k limit for benefits and claim.

franney

Hi, Franney,

You can't have no income, you would starve ;-). Are you/will you be receiving maintenance payments from your ex-husband? ( Not nosiness :-), it's just much easier to advise when the whole picture is available )

Cheerfulcat

I live with my partner who provides for me (sounds so old-fashioned but have brain strain and can't think how else to phrase it!)
I do not receive any maintenance from ex-husband, just this one-off payment after sale of matrimonial home.
I appreciate that you aren't being nosey, i should have explained properly in my first post!
Thanks for any advice you can give me

franney

Hi Franney,
Don't worry about everything being confusing at the moment. It all comes together in the end and you're in exactly the right place with all this lovely advice. I'm also a (bad) housewife. Spend too much of my time on this chat forum!

What I would do (and of course I might be completely wrong) is to put your £10,000 into a high interest account (can't advise you on which one i'm afraid but look on the website under savings and investments)and set up a standing order into the Halifax Regular Saver at 7.07% for the maximum amount your allowed which is £250 a month. At the end of the year they will transfer it to an account you have opened with them, probably the Halifax Web Saver, which might be a good place to put your other £5000 as it is high interest and easy access.

By then you might want to transfer the amount into a cash ISA. Does that make sense. It is really easy to open the accounts for the Halifax. I know cos i've just done it, as long as you have a branch near you.

Lopk at Martins advice on his saving fountain. It is really good. Hope this helps

Julie, yes, it does help me! A great deal, thankyou for your response
That is what i was thinking of doing, but being new to the world of finance (lol) i find it hard to keep on track and not get lost amongst all the different types of accounts!

To add to Julie's ideas, you can also open an Abbey Regular saver, and use the £10000 corpus to drip-feed both the Halifax and Abbey regular savers (to the max of 250 and 500 per month) This would mean that at the end of one year, you'd get a lump sum of £9000 plus the interest at a healthy 7%.

This can all get confusing, so here's the plot:

1. Open an egg account and put in £10000 there. This will earn you 5.5% for the first six months (0.75% over the Bank of England rate), and then on it will be at least equal to the Bank of England rate (currently 4.75%)

2. Open Abbey and Halifax regular savers and set up standing orders from the above egg account to fund these accounts monthly for £500 and £250 respectively.

3. Open a couple of other accounts with Abbey or Halifax, one an e-saver that will earn interest in the range of 5%, and another which will give you a debit / ATM card. The £5000 which you want access to without notice can sit in the Websaver earning interest at 5%, and when you want access to it, all you need is transfer it through the Internet or the phone to the second account and use your card to withdraw it.

Walletwatch, thankyou so much for explaining it in simple terms for me! I think i understand the process more now,

I can't believe i am going to go from No bank accounts to 5 in a matter of days! lol
Thanks again, i really do appreciate it