never had maount b4 what should i do ?

Bella79

Hi all

Me and hubby have been very lucky and will have 10,000 coming to us at the moment we have no savings at all, So we want to save this

Wheres the best palce to put it ? were quite happy to tie it up for a while but dont want any risk

Any help would be very much appricated

Thankyou

dunstonh

but dont want any risk

Every option has risk. What you probably mean is that you dont want investment risk but dont mind having inflation risk or shortfall risk.

If so, then a bit in cash ISAs and a bit in NS&I index linked certs is probably a good place to start.

Bella79

so when u see savings accounts with a 6% intersest rate i would have to pay tax on that ?
Sorry for being totally dumb lol

D1zzy

Potentially yes. Do you pay tax at the moment?

JoeCrystal

There is not that many if any 6% interest savings acccounts.

As it is, all interests are taxed 20% and if you are higher rate, then you pay other 20% in your tax return.

As I recalled, there are only three ways to get interests tax free, Cash ISA (Individual Savings Account), from your local banks and such and Index-linked Savings Certificates & Fixed Interest Savings Certificates from NS&I. I am sure there are others but these three are what I known of.

You are not dumb, you just want to learn about these things.

EDIT: On other hand, if you do not pay taxes due to your income within personal allowances, then you just file form R85 which you then receive tax-free interest on your savings. It is important to check that your income is less than your tax-free income limit from one year to the next.

EDIT2: If you truly want to tie the money up, then as dunstonh pointed out is good idea, £3600 in Cash ISA is the maximum in this tax year.

Baldur

JoeCrystal wrote: »

£3600 in Cash ISA is the maximum in this tax year.

That figure is per individual saver, so you and your husband could both open Cash ISAs and deposit £3,600 each.

Bella79

Ahh ok thankyou understand a bit better now , yes we do pay tax my hubby is self employed and will have a tax bill this year

Thankyou all for your help muc appricated


Sorry jst wanted to ask if me and hubby open one each that 7200 what should we do with the leftover ?

D1zzy

If you do not pay tax (only your hub) - if you put all the money in an account in your name you could earn interest tax free

opinions4u

First thing I would do is look at any debts you have (credit cards, loans etc) that are attracting interest charges and consider paying these off.

Then look at your mortgage - is it worth making a part repayment and reducing your term or your payments (or a bit of both)?

Then I'd suggest splitting what's left over in to different pots ... crisis fund, medium term and rainy day.

Crisis ... fund I'd suggest should be around 3 months net income ... so if you can't work for any reason your bills are covered for that period. I'd usually suggest an instant access type account for this although a cash ISA is an option.

Medium term ... what inevitable bills are going to come along that you haven't made provision for (e.g. replacement car, kids going to uni etc). Cash ISA again would be an option, although some fixed term accounts with a 2 year term are paying better rates after tax than ISAs are before tax.

Rainy day ... this is money that you stick away and forget about until you really need it. Plan a cruise (or some other special treat for yourselves) for the year 2019 (or whatever date suits) and allocate this money to that event. Something like NS&I index linked savings certificates can protect the value of this money against the impact of inflation.

There are lots of different ways of managing your savings. My suggestions aren't necessarily the best for everybody, but hopefully there give you some ideas as to how you can compartmentalise the money for greatest benefit.

Don't forget if your on top of the day to day household finances you can also add to the funds too.

£10k is a nice place to start. But if you don't nurture it you could easily go through it at amazing speed!

Bella79

THankyou

We dont have any debt at the moment well except the morgage , However hubby been self employed i would like a bit in a instanst savings accountat and then the rest put away
i already save monthly for holidays,chirstmas,everyday savings for (clothes,shoes etc)

*what i ment to say on the orig post when i say i have no savings is i have noting over a few hundred nothing **

dunstonh

Ahh ok thankyou understand a bit better now , yes we do pay tax my hubby is self employed and will have a tax bill this year

As your husband is self employed, that means he doesnt get the full state pensions. So, that means he is heading for around £5000 a year maximum in todays terms in retirement. Many self employed people dont realise they get less in state pensions. So, maybe some of the money could go towards your retirement planning?