Info needed about tax, interest & savings

Vegeta

I put my house on for sale a month ago and found a buyer. The completion date is in a few weeks.

I was wondering what to do with the money from the sale as I will be renting for the moment.

I currently receive tax credits. Will they be affected by the amount of savings I have?

I plan to put the money from the house into an instant access savings account. EGG are currently offering 3.25% gross pa/AER.

Thanks.

Masomnia

I believe that you will have to declare the interest you receive as it does count as taxable income, and it will count against you in terms of the tax credits. I don't think the actual amount of savings you have counts, just the income you recieve from them.

You can minimize this by putting as much as you can in an ISA, the interest on which is not taxable.

Vegeta

The reason I want to put my money in an instant access savings account is because I will be actively seeking to buy a new house and don't want to lock my money up on a Bond/ISA.

I'm not that knowledge when it comes to bonds and ISAs but is there a way for me to put my money into one which has 90 day access or so and then have access to the money for a house purchase? How would that work with the 90-day delay?

Lokolo

There are 90 day access but they are pretty rare.

Egg is your best bet.

Hungerdunger

Vegeta wrote: »

I currently receive tax credits. Will they be affected by the amount of savings I have?

This is from the HMRC website: (My italics)

Changes in your income

It's important to tell us straight away if your income goes up or down. The amount of tax credits you get depends on how much income you have coming in.
If your income for the current tax year is expected to be less than last year, you may be entitled to extra tax credits.
If your income for the current tax year is expected to be more than £25,000 higher than income for the last year, you may get less tax credits.
If you expect your income for the current year to be no more than £25,000 higher than your income for the last year, it will make no difference to the amount of tax credits you will receive for the current year. However it's still a good idea to let us know about the change as the increased income will be taken into account:

• in the following year
• for the payments made to you after April, but before you've renewed your claim

If you don't tell us until you renew your tax credits after the end of the year, we may ask you to pay back any money we've overpaid you.

Vegeta

Am I right in assuming that the FSCS protection for joint accounts is double i.e money in a joint account is protected upto £100,000?

Loco

Vegeta wrote: »

Am I right in assuming that the FSCS protection for joint accounts is double i.e money in a joint account is protected upto £100,000?

yes indeed