building society account - advice needed!

TeaBoy_2

couple of things I'd like help with.....

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I currently have a 'Young Sovereign Share' account with my building society that was opened many years ago when i was just a wee bairn (i'm now 24).

Recently i've decided to take more interest in my finances and after reviewing my statements i'm a little worried i'll have the tax man at my door.

Theres over 4 grand in this account and not a penny of tax has been paid. I am still a full time student so I hope this will mean i'm exempt from any tax on savings?? Could anyone confirm this?

If I do owe tax, or was to leave education, what would you suggest I do?

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Should i stick with this account anyway? the interest rate seems to fluctuate (3.7 to 4.65 last year). it earned 4.24% on my last statement.
Or would i be best with an ISA? or just use it to pay off the student loan?

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Theres also the possibility of a cash windfall if it turned into a bank. is there likely to be a minimum investment to be elligible?


thats all.

dunstonh

I am still a full time student so I hope this will mean i'm exempt from any tax on savings?? Could anyone confirm this?

Students are not exempt from tax. However, if your income is less than £5035 a year, then you are exempt from tax. So, any part time jobs you may have could impact on that.

Should i stick with this account anyway? the interest rate seems to fluctuate (3.7 to 4.65 last year). it earned 4.24% on my last statement.
Or would i be best with an ISA? or just use it to pay off the student loan?

Don't know enough about the product to compare.

Theres also the possibility of a cash windfall if it turned into a bank. is there likely to be a minimum investment to be elligible?

Nearly everybody who has held on to products for the hope of a future demutualisation has lost money by doing so. It shouldnt be a reason to have it there.

Dr.Lou

I am pretty sure any research awards or bursaries are exempt from being classed as taxable income too.

TeaBoy_2

thanks for the replies, i'm currently under the tax threshold (not so sure for previous years) so shouldn't be paying tax at the mo.

Think im going to transfer 3k to one of their ISA accounts for when i finish uni.

steady__eddie

Quote:
Theres also the possibility of a cash windfall if it turned into a bank. is there likely to be a minimum investment to be elligible?

£100. Ensure that you keep at least this amount in your a/c.
You could always transfer £3k now to an I.S.A with another institution thereby doubling your chances of an hypothetical windfall and more importantly increasing your distance from the £5030 limit.

Robert_Sterling

There are now 63 Building Societies.
Soon this will be down to 60.
Lambeth, Universal and Mercantile will disappear.
Merger Mania is the name of the game now not demutualisation.
The "Sign away to charity" clause does not apply to mergers.
The windfall is taxed when it results from a merger.
Lambeth members will get £400 or more pre tax i.e. £320 after 20% or £240 after 40% tax. You have got to be in to win.
Need to have £100+ at the appropriate times.

ReportInvestor

dunstonh wrote:

Nearly everybody who has held on to products for the hope of a future demutualisation has lost money by doing so. It shouldnt be a reason to have it there.

In this case I beg to differ, dh, on the assumption that the account is with the Skipton BS. I would keep at least £100 invested with our friends from the Dales. It is probably the last BS account anyone should close.

By all means make sure that you move some/ all of the money to an appropriate account, it would be very foolish to do anything that would lose membership with the society.

Usually there's no reason to lose much money, as long as you look out for the right account - or wait for the right fixed rate bond to come along.

I assume you weren't suggesting that people have "lost money" by having their rainy day savings with a BS rather than in stock market products, which would be inappropriate in the OP's case.