Totally Confused

cheerfulcat

Alunp,

You wanted to know where to find the best interest rates; you were pointed to a comparison site, and told that a fixed term account would probably provide the best rate. I am a little put out that you did not even acknowledge my answer on the other thread, yet now you take offense at a perceived snottiness.

To come back to your questions; I think that Martin's many weird and wonderful combinations of savings arrangements have confused you. All that you need to do is put the money in the account with the highest interest rate, preferable with no bonus ( this adds to confusion ) and arrange for the interest to be paid monthly.

To the others I'd recommend not posting anything at all.

Thanks. Perhaps I'll take you up on that.

alunp

Cheerfulcat

I did acknowledge your answer. I replied straight afterward with a question on regular saving accounts hitting financial limits. Not at all relevant as I've now learned, but that was down to me not knowing or understanding what you meant by a "term account".

I feel that you're reacting like I'm rude and wasteful of people's time when I'm not. I simply don't have a clue about this kind of thing. If you look back at the other thread you'll see an immediate response (2 mins later).

And when you look back at it you'll probably see from the fact I've spectacularly missed the point with my question that I was completely befuddled by the array of options and the jargon used.

As nobody replied to that question, and as it was becoming clear that I needed to ask a different question that put my confusion to the very fore, I started a new thread.

I really can't see why that has irritated you. The only thing I've done wrong here is fail to instantly understand the information out there, including your initially kind response.

I don't think the impatient tone of your message here was really needed. If I'm guilty of anything its not understanding the jargon and not understanding the whole arena of savings. Like I say, I'm certain I'm not unique with that.

But then I made that clear when I started the thread by calling it "Totally Confused".

It'd be better if you gave me a bit of leeway and not confuse my bemusement with rudeness, and not be impatient with my confusion either.

At the very least I hope you can see that you've no need to be put out by what you assumed to be my lack of a response, when in fact it was immediate. It was an uninformed response I admit. But I didn't know that then, and I wasn't intentionally trying to pee anybody off.

I was merely confused, but then I have admitted that from the outset of this thread.

You needn't assume I'm someone out to waste everybody's time deliberately when in fact I'm simply a genuine person seeking some friendly guidance.

Al

Voyager2002

humfer wrote:

Put £3k straight into an ISA and open as many regular saving accounts as possible (ranging from 7% to 10% from the likes of Halifax and A&L) drip feeding £250 per month. The rest just stash away in the top paying internet account..

But the OP is a non-taxpayer, so there is no benefit from using an ISA.

EdInvestor

But the OP is a non-taxpayer, so there is no benefit from using an ISA.

Not at the moment there isn't , but he may not remain a non-taxpayer forever: and if he doesn't use the ISA allowance he loses it.

Unless Alun finds the ISA also too confusing, seems to me he may as well put 3k a year in one for the long term ( and he could use his wife's ISA allowance for another 3k as well.)

Ideally he wouldn't use the money in the ISA to pay off the mortgage, he would leave that money in the ISA to accumulate long term.

alunp

can u get the interest monthly from an isa or is that classed as a withdrawal?

Hereward

Personally, I would classify the taking of interest from an ISA as a withdrawal, as I am after capital growth, i.e. my savings increase by the interest earned each year. If you want monthly interest and have it paid into a different account, you need to choose carefully as not all providers supply this facility.

MikeP_5

Distribution Bonds are another option - if chosen carefully! They allow you to take 5% income each year on a 'tax deferred' basis - therefore your £25k would yield £1,250 per annum. The return is, in effect, tax free as long as you are not a higher rate taxpayer when you finally encash the bond. The incoem is treated as a return of capital by the taxman and is therefore not taxed at source.

They tend to invest in gilts and fixed interest securities which are reasonably secure - I have used Standard Life in the past as their version consistently provides around 8% return in total, thereby providing income plus inflation proofing.

Be careful though - the bonds are generally available in 2 versions - one has an initial charge (which I would normally use rebated commission to bring down to nil) - the other has an 'enhancement' which ties you in for 5 years. As ever, take proper advice if you go down this route.

alunp

Hereward wrote:

Personally, I would classify the taking of interest from an ISA as a withdrawal, as I am after capital growth, i.e. my savings increase by the interest earned each year. If you want monthly interest and have it paid into a different account, you need to choose carefully as not all providers supply this facility.

Hereward, I see what you're saying but what I mean is that many accounts will say things like "only x withdrawals per year." By their definition, is the payment of interest (say into another account) regarded as a withdrawal by their rules. Or is skimming off the interest pretty standard practice?

Al

jem16

alunp wrote:

Hereward, I see what you're saying but what I mean is that many accounts will say things like "only x withdrawals per year." By their definition, is the payment of interest (say into another account) regarded as a withdrawal by their rules. Or is skimming off the interest pretty standard practice?

Al

If you took the interest monthly it would be regarded as a withdrawal. Most people use it to build up capital but there's no problem withdrawing it if you do want a monthly income. You just have to select an account that has no withdrawal penalties such as;

http://www.bradford-bingley.co.uk/savingsandinvestments/esavingsISA.asp

equitydealer

Comments in blue

alunp wrote:

Hi

I've read the articles on here about saving, and I've read the sections of Martin's book about savings and my head is all mashed up.

Help!

Can someone decode it for me.

Here's my situation and here's what I'm aiming for.

I'm a non taxpayer who'll prob stay that way. Wife is taxpayer.
Make sure she is using her ISA allowance

I have between 25k to 30k.
Even though ICICI pay the highest rate, some people have had problems running their accounts. BM is a one year intro offer, so unless you want to swap out next year the best account in my opinion is Bradford and Bingley 4.85% (interest paid monthly)

I'll be paying off 4750 off my mortgage (the most I'm allowed to each year).
I assume you are limited by payment restrictions? Is it possible to switch to a mortgage account provider that does not penalise for overpayments?

My aim is to reduce my monthly outgoings either by cutting expenses directly ie the mortgage payments, or by bringing in some interest each month from the savings.
Best way to cut expenses is to draw up a budget and stick to it. For monthly income are you willing to invest (for example in shares?) There are some high dividend payers, some companies pay upwards of 7% a year but your capital is at risk

So bluntly speaking, I want the money to benefit me every month.

What's the best strategy for that because I'm completely lost.

Help and thanks!

Al