Help help help! Please!!!

kc_12321

Hi,

I'm so lost!!

In a nut shell I have about £5000 now to save! Then I'm going to try and save £350-£500 per month as of April...

I think, reading the advice on this site, that a cash ISA is the best place to put my savings but I really don't know which is best, why, what I need to know, what I need to look out for, or anything!

Would any of you lovely ppl be able to help me make sense of all the gobble-dee-gook out there!!

Thanks!!!

blueberrypie

Well...are you saving for anything specific? Is there a particular timeframe? Will you definitely want access to the money at some point in the future (known date or not yet known)? Or *might* you need access, for emergency repairs, for example? Or is this intended to be your long-term savings plan?

Are you a taxpayer? If not, do you expect to be a taxpayer at some point in the next few years?

kc_12321

well currently my savings go into a "savings account" that's with my bank (HSBC) and they're linked, so if I unintentionally need a few extra quid I dip into that! But I really don't want to! Sometimes it's a silly little splurge on something unnecessary, this I'd like to avoid! Sometime's though I need access for essentials...

I don't have a fixed date I'll need it by but I may need it at the end of this year, at the end of next year or the year after, so locking it away isn't really an option!

Yes I am a tax payer!

rb10

Halifax ISA Direct Reward.

Pays 2.8%, but if you open a Reward current account as well you'll get 3% on the ISA and £5/month on the current account.

The limit on deposits into an ISA is £5100 per tax year - this means that you can pay in up to £5100 between now and 5th April, then (in total) a further £5100 between 6th April 2010 and 5th April 2011.

blueberrypie

I'd agree with rb10 that the Halifax Reward ISA is probably your best bet. There are no savings accounts - either ISA or non-ISA - paying more than 3% net right now without locking the money away, and as you might need to dip into it, the Halifax ISA fits the bill - especially if you can also open the Reward current account and put £1000 into it each month (you don't need to leave the money there - you can simply transfer it in and back out again, or even do more than one transfer - as long as it adds up to £1k/month you'll get the £5 Reward).

ISA basics:
You get an annual ISA allowance. This controls how much you can *deposit* per year - so if you deposit the full allowance, then remove (e.g.) £500, you can't put that £500 back.
If you choose an instant-access ISA, you can move the money to another ISA whenever you want, but you must keep the current year's funds all together. Money you saved in an ISA in a previous year can be split up however you want. However in all cases you must get the new ISA provider to arrange a transfer - you must not transfer it yourself.
People get confused about only being "allowed one ISA". You can *have* as many ISAs as you want. You can only put new money into one each tax-year - but you can certainly *have* more than one ISA. ISAs can have funds added by:
- new money going in (this is called "subscribing" and it counts as part of your allowance)
- old ISA money being transferred in (this does *not* count towards your ISA allowance)
- interest being added (this also does not count towards your ISA allowance).


I hope that clears up some of your confusion - ask again if there's anything you're still unsure about.

blueberrypie

rb10 wrote: »

The limit on deposits into an ISA is £5100 per tax year - this means that you can pay in up to £5100 between now and 5th April, then (in total) a further £5100 between 6th April 2010 and 5th April 2011.

You mean between 6th April 2011 and 5th April 2012 - and also the cash ISA allowance is increasing in April, so you mean £5340 :-)

kc_12321

Super, I'm starting to get it... I think!

Sorry if I'm repeating what's above but i want to make sure I know what steps to take now!!

So! I should open a Halifax Reward account, which it looks like I can do online. To benefit from £5 a month reward I need to pay £1,000 during each calendar month. So, I'm paid on the 28th of each month, if on this day I transfer £1,000 into my new Halilfax account and then send it back from Halifax to HSBC I get £5?

Then after opening the above account I start a Halifax Cash ISA (also online?) I then get a 3% tax free interest rate...

Have I got it?!

blueberrypie

kc_12321 wrote: »

Super, I'm starting to get it... I think!

Sorry if I'm repeating what's above but i want to make sure I know what steps to take now!!

So! I should open a Halifax Reward account, which it looks like I can do online. To benefit from £5 a month reward I need to pay £1,000 during each calendar month. So, I'm paid on the 28th of each month, if on this day I transfer £1,000 into my new Halilfax account and then send it back from Halifax to HSBC I get £5?

Then after opening the above account I start a Halifax Cash ISA (also online?) I then get a 3% tax free interest rate...

Have I got it?!

Yes, you've got it.

Personally I'd try to do the £1k transfers on or just after the 1st of the month (i.e. use January's salary to fund the Halifax account for February and so on) - just to take into account things like weekends and bank holidays. Your payments between HSBC and Halifax *should* go by Faster Payments both ways, but just in case you get stuck with a BACS payment once in a while, it's best not to cut it too close.

kc_12321

Brilliant! Thanks for your help! I've done the set up for a current account online so I just need to go in and prove to them I am me! Then next week I'll set up the Cash ISA account and start saving!!!

Thanks again!!!

rb10

kc_12321 wrote: »

So! I should open a Halifax Reward account, which it looks like I can do online. To benefit from £5 a month reward I need to pay £1,000 during each calendar month. So, I'm paid on the 28th of each month, if on this day I transfer £1,000 into my new Halilfax account and then send it back from Halifax to HSBC I get £5?

Then after opening the above account I start a Halifax Cash ISA (also online?) I then get a 3% tax free interest rate...

Yes, but it would be simpler just to get your employer to put your salary straight into the Halifax account - it just means that you only have to run one account rather than two.