Best saving products for a non tax payer ?

tonyb61

My wife has been given some money by her parents, about 10k. She doesn't work or pay tax, and she is happy to tie the money up for say 1 year. What's the best way of investing this cash ?

Reaper

You say "saving" an "investing" as if they mean the same thing. Assuming you mean saving (ie no risk) the process is almost the same as for a tax payer except you can skip the tax free accounts like ISAs (unless she is only temporarily not working and wants to make use of her full allowance this year).

Look at the best buy tables on the usual comparison sites, pick the one you like and be sure to tell them you want them to pay the interest without tax being deducted.

tonyb61

As in the previous poster pointed out, I meant savings as opposed to investment ! My wife isn't planning to work so she will not use her tax allowance. I'll look over some of the usual sites.
Thanks

Mikeyorks

You could start here ? :-

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

Sceptic001

Index-linked savings certificates provide protection against inflation if held for a year or more. The 3-year issue pays RPI + 0.85% after one year. They are tax-free, so of more advantage to a taxpayer, but if you think that inflation will be more than the Bank of England projection of 2% in the coming year they compare favorably to most one-year fixed rates even for a non-taxpayer.

Mickygg

I have been looking at one year bonds, and to be honest the rates are particularly low at the moment. If you can tie up for longer then you can get up to 5% gross for up to 5 years.

I would recommend using an instant access savings account, such as the AA that is 2.8%, as there is not much else out there much higher than this and you have the added bonus of being readily available should you need it. That's what I am currently doing until if and when rates start to increase a bit for fixed rate bonds.

juicyjude

True your wife may not need the tax free saving which ISAs give but I am in the same situation as I dont work and found that I had to deregister for tax in Feb of this year as I nudged over the threshold. She must do her calculations very carefully and be sure that she will never earn enough to pay tax again. I am keeping all my ISAs just to keep them as a tax free wrapper.