Is it worth it for me?

CurrentWorker

Im currently in college aged 17 and have a part time job. I currently have 1000 pounds in my Lloyds eSavings online account. Most of my wages are going straight into eSavings. I do not have a use for it at all so I dont expect to be taking it out at all. I do have a separate tin aside (not in a bank but at home) which me and my girlfriend use for emgerencies. We also both live at our own parents ect.

Should I be saving into an ISA or not?

lisyloo

£1000 is a realtively small amount.
I know it might seems a lot to you but interest will be £16 and income tax £3.20.

An ISA is a good idea long term because your interest is then free from income tax for the rest of your life. Overtime this will build.

You also might be able to kill 2 birds with one stone becuase your account is currently paying 1.6% and you ought to look for a higher rate.

f0rmula

Yes, it's worth it. Not for the £28.50 interest you'll get from it this year, but because you'll understand how the process works, how to fill forms in and get through it quickly, and it'll get you into the habit of this sort of thing as early as possible.

I'm 29, and I regret that no one talked me through this and encouraged me to do this when I was 17. I might have had a house by now.

CurrentWorker

I should have around 2500-3000 by end of tax year...

Still not sure if I should bother with an ISA then and just look for a normal savings account

Edit:

Oh okay..I just have a think about it then

DavidHayton

lisyloo wrote: »

£1000 is a realtively small amount.
I know it might seems a lot to you but interest will be £16 and income tax £3.20.

Careful .... Dave and Georger need every penny that they can get to deal with the deficit. 320p is 320p!!!

David

gt94sss2

If you are not a taxpayer, you are entitled to receive interest tax free from normal bank/savings accounts as well as within ISAs.

To make sure you register any non-ISA savings/current accounts to receive interest tax free, fill in an R85 form and return it to the relevant financial institutions.

You may sometimes find that the 'gross rate' on a normal savings account is higher than the rate paid on an ISA.. and which is the better option for you would probably depend on when/if you may need the funds (and your future income level)

Regards
Sunil

DavidHayton

gt94sss2 wrote: »

If you are not a taxpayer, you are entitled to receive interest tax free from normal bank/savings accounts as well as within ISAs.

To make sure you register any non-ISA savings/current accounts to receive interest tax free, fill in an R85 form and return it to the relevant financial institutions.

You may sometimes find that the 'gross rate' on a normal savings account is higher than the rate paid on an ISA.. and which is the better option for you would probably depend on when/if you may need the funds (and your future income level)

Regards
Sunil

This is a very good point