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Savings Account Advice Needed
mountainofdebt
Posts: 7,795 Forumite
For Junior really!
He's got himself a part-time job so we've suggested that he puts part of his wages into a savings account.
He will be earning about £70 per week, and at the moment doesn't have a real need for the money.
Plan A is to join the Armed Services straight after 6th form although if that doesn't come off and he needs to resort to Plan B ( ie go to Uni in September) .....even if Plan A comes off it looks increasingly likely that there will be a gap of a couple of months in between doing A levels and actually joining.
He also has £600 to kick start the account with.
He's got himself a part-time job so we've suggested that he puts part of his wages into a savings account.
He will be earning about £70 per week, and at the moment doesn't have a real need for the money.
Plan A is to join the Armed Services straight after 6th form although if that doesn't come off and he needs to resort to Plan B ( ie go to Uni in September) .....even if Plan A comes off it looks increasingly likely that there will be a gap of a couple of months in between doing A levels and actually joining.
He also has £600 to kick start the account with.
2014 Target;
To overpay CC by £1,000.
Overpayment to date : £310
2nd Purse Challenge:
£15.88 saved to date
To overpay CC by £1,000.
Overpayment to date : £310
2nd Purse Challenge:
£15.88 saved to date
0
Comments
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Is Junior 18 yet? If so a cash ISA is the obvious choice, as all the income will be free of tax. You could look at a fixed or variable rate ISA.No free lunch, and no free laptop
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Yeap he is 18.
Would he be able to get access to the cash with an ISA? Just thinking that if he does go to Uni then having access to the cash may be useful....though at the mo, if he had to activiate Plan B then he may still be able to carry on with his job as the Uni he wants to go to is the local one.2014 Target;
To overpay CC by £1,000.
Overpayment to date : £310
2nd Purse Challenge:
£15.88 saved to date0 -
Yes he will.
Currently best instant access isa is Santander 2.85% and he can have a cash card for it if he desires.0 -
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Yes opinions4u I agree with your statement ha ha!0
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http://www.halifax.co.uk/savings/accounts/cash-isas/isa-direct-reward/
If you want something a little less but a lot less hassle :P0 -
mountainofdebt wrote: »Yeap he is 18.
Would he be able to get access to the cash with an ISA? Just thinking that if he does go to Uni then having access to the cash may be useful....though at the mo, if he had to activiate Plan B then he may still be able to carry on with his job as the Uni he wants to go to is the local one.
Yes, but once you withdraw ISA funds, the tax free aspect is loss forever-you cannort reinvest it in an ISA for that year. ISA funds should be seen as long term savings.No free lunch, and no free laptop0 -
Is Junior 18 yet? If so a cash ISA is the obvious choice, as all the income will be free of tax. You could look at a fixed or variable rate ISA.
Don't forget that a non-ISA account can pay just as much interest (if not better) to a non-taxpayer.
If he chooses something like the Santander or Halifax account above he should register for gross interest. EDIT : IGNORE THIS SENTENCE - JUST REALISED SANTANDER and HALIFAX ACCOUNT MENTIONED ABOVE ARE ISA'S0 -
For ISA accounts interest is already paid tax free so you can't register to get tax back on it.Don't forget that a non-ISA account can pay just as much interest (if not better) to a non-taxpayer.
If he chooses something like the Santander or Halifax account above he should register for gross interest.
The total he will earn at £70 pw is £3640 py which is comfortably below the cash ISA limit of £5100. Even if he draws money out routinely he will still be able to top it back up again and gets a new limit of £5100 in April so in this case I don't think it really matters whether it is considered long term or short term savings.Remember the saying: if it looks too good to be true it almost certainly is.0 -
For ISA accounts interest is already paid tax free so you can't register to get tax back on it.
I know that, which is why I reminded to register for gross interest if he chose the Halifax or Santander account. SEE MY EDIT
A non-isa account would be ok for him at the moment as he is not earning huge sums and maybe dipping into the money.
EDIT: apologies Jimjames I had not clicked on the HALIFAX link to see if was an ISA and did not see the word (ISA) in the Santander sentence.0
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