Please Help!

ger_ryan22

Martin is on Radio 2 as I write this, anyway, what I want to know is, when do you pay tax on your savings? Myself and my partner who have a joint current account pay £1000/mnth in to our savings acount, this is money from our wages that we are really trying hard to save becasue we're getting married next June. As this money has already been taxed will i need to pay more on it? Because if it is then I might as well take it all out now and keep it in a sock in my chest of drawers because that is our money!! can somebody please help!!!!!?

dunstonh

As this money has already been taxed will i need to pay more on it?

You pay tax on your the interest your savings generate if your annual income exceeeds £5035 (under 65s).

Because if it is then I might as well take it all out now and keep it in a sock in my chest of drawers because that is our money!! can somebody please help!!!!!?

Well that would just be foolish. You would rather earn nothing just to avoid paying some tax which would drop your return by around 1% p.a. giving you around 3%?

robnye

why dont you start 2 isa's you can £3000 per person (so thats £6000) covered tax free, then pay the remaing £6000 into the normal savings account, therefore cutting the amount of tax you might pay

Andy_L

Basic rate tax is deducted by the bank. Are you both making use of your tax free ISA allowances?

you only pay tax on the interest your savings earn, not the amount saved, so putting it in your sock drawer will cost you. Whilst you won't pay tax you won't gain any interest either

ger_ryan22

Thanks for the help folks - so here's the deal then - I could save 13000 (my target) over the next few months but I will only pay tax on any interest I make? I basically need the 13k at the end but i don't mind paying tax on any interest once I have 13k, the ISA sounds good, do you mean we can both save 3k each and not pay any tax on interest? Then I can just start saving the rest in my normal account! cheers, where and how do you set up one of these ISAs and can you withdraw anytime you want and how ever much you want?

ger_ryan22

Thanks Andy, just got your post now as I was writing mine cheers! I'll have to look in to this ISA thing!