What do I do with my money?

Cheetah

Hi there,

Just a quick thread to ask for suggestions on what todo with my money. I am a student in my first year. I bank with NatWest and would like to keep everything there if possible as I can manage everything online in one place and it makes it easier for me as I won't get confused. (But I do have a current account with Abbey/Santander if it helps)

At the end of this month my accounts should sit as follows:
Student Current Account: £840 available (0% overdraft)
ISA Plus Account: £2050 + interest
e-Savings Account: £2590 + interest

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I think that £840 will be enough to cover expenses until I get a job or two in the summer after exams but I want to leave at least £250-500 in the e-Savings for contingency as it is easy access as rent starts on 1st July at £300/month.

I worked the interest on the ISA Plus account to be 3.22% based on last months interest. Whether this will go up or down I have no idea. Not even sure what the Plus at the end of the account name means. I opened the account on the 18th May 09.

Has the ISA allowance gone up this year because some websites are quoting 5.1K but it says 3.6K is allowed this year on my online account.

I haven't worked out the interest on the e-Savings account yet but it would be pretty low.

Is it true that students don't have to pay tax on interest on savings? If so, how do I apply to not get taxed?

So, should I just fill my ISA account or do something else. I don't really want penalties if I end up having to use the money I am saving as it all depends on whether I can get a job in the summer or not.

Thanks.

berrya1

Hi I currently bank with Natwest and have the same accounts as yourself. A few points to make here:

Firstly re-check your ISA allowance today. Mine originally said 3,600 it has now been updated to 5,100.

In addition the ISA-Plus is probably the best ISA you can get to date, certainly if you are wanting to stick with Natwest, it blows its fellow ISAs out of the water... so much so no new customer is now able to open an ISA Plus.. So take advantage of it!

The interest rate on the e-savings account is ridiculously low so make sure you keep as much money in your ISA without selling yourself short.

As for the student tax issue. You are correct you do not need to pay tax. For this there is a form you need to fill out to stop being taxed moving forward. If you ask at your branch for a tax exemption form they should be able to give you one. As a heads up this (from memory), is only for the current tax year onwards. It will not reimburse you for previous years. If you have been taxed in any bank account ever in your life while as a student you need to get a tax certificate for that account and tax year. Best going into the bank and asking for these anyway as its not always easy to identify if you have been taxed. i.e. "Can I please request all tax certificates for account xxxxxxxx for the past 6 years. Thank You" – That is the maximum by law they have to provide.

Unfortunately with Natwest you cannot order these over their internet banking like other banks such as Nationwide. Once you have the forms, you can send them off to HMRC to reimburse your tax. ALSO given that you are a student, don't forget you can get tax reimbursed from any employment you may get i.e. summer jobs as you are not a full time employee (but will get taxed like one). THUS at the end of every tax year, make sure you send of your P60 (or final payslips) to get some money back. For more information or to see how much you are owed, there is an online student tax calculator you can use: http://www.hmrc.gov.uk/calcs/stc.htm

Although you may not have a job yet, it is worth checking against previous tax years if you have worked at any point while at college etc. I usually ended up claiming £250-£500 a year doing this while as a student!!

Hope this helps... Anymore questions just let me know. It was only a couple of years ago when I was a student at Uni and still to this day bank with Natwest (among others). So I have a decent knowledge of all the hurdles to jump through as well as some ways to save money!!! :-)

Cheetah

Thank you very much for your reply you. I think you covered all the points

CLAPTON

students pay tax just like any other citizen of the UK.

all Uk citizens are allowed income of 6475 (excluding ISA income) per annum before tax is payable.

If your total income (i.e.earnings and non-ISA interest) is less than 6475 then you can fill in R85 forms to get your interest paid gross.