want to start saving...HELP

mrsh72

I have never been debt free and now I am I want to start saving for when we start a family in a few years for example and just generally saving.

So, where should I put my money? ISA, savings account etc. I am completely dumb when it comes to this. I just ahve a current account with natwest so would appreciate any advice!!!!

edinburgher

Are you still in debt? If so, paying down debt will often give a better return than the best savings rates.

Otherwise, the stickied guide to the best savings accounts is the place to start. A cash ISA will protect you from paying any interest, so these are often the best deal available. That said, if you don't pay tax there may be more competitive instant access accounts available.

Shop around, be prepared to move your money once a year and start with small, regular payments as it hurts less

atush

Are you employed? Do you pay tax? Do you have a pension? Does your employer pay in of you will?

How much can you save per month to start off?

lukeh23

Was meant to be a new topic, please ignore (mods delete please)

mrsh72

I'm not in debt I do work and pay tax and am starting a pension this month. Font understand why with any savings I would have to pay interest...told you I was confused. I was planning on puttingbin a couple of hundred a month and maybe my husband too when he starts a new job

Wobblydeb

Have a look at regular savings accounts. It gets you into the habit of putting a regular amount away each month (I would recommend the day after payday so that you don't miss the money) and they pay some of the highest interest rates around.

They usually last a year, and there is a catch - with many of them, if you withdraw the money before the year is up you lose that great interest rate. I like that because it stops me being tempted to spend the cash on frivolous stuff, but can be accessed in a true emergency.

Yes, you pay income tax on interest. Banks automatically deduct the 20% rate, before paying you your interest, so you probably don't need to do anything. If however you are a higher rate taxpayer, it should be declared in your tax return each year.

This is why people use ISAs, because the government allows the interest to paid in them tax free. However, the rates are generally not as good as regular savings accounts which is why I recommended those.

e.g. You can get a First Direct regular saver for 8.0% which equals 6.4% after tax has been deducted.
A good ISA at the moment pays about 3.4% which is about £36 less interest a year on your £200 per month.

atush

If you pay tax, it means you earn enough to have income above your personal allowance. So I would save intoa cash isa (instant access) so that you do not pay inc tax on your interest.

Then, once you have 3-6 months of spending in cash as an emergency fund, you can start saving eslewhere. In fixed rate cash isas, regular savers, S&S ISAs and investment trust savings schemes.

Have fun starting this new more comfortabel part f your life ;-)

mrsh72

I think I will look into isas and regular savers. It is sooooooooooo confusing!

One more question with ISA's, could my husband also pay in once he has cleared his debt too?

Wobblydeb

Unlike many bank savings accounts, ISAs can only held by one person.

Yes your husband can pay in to yours, but it would probably make more sense for him to open one for himself.

atush

your husband can open his own ISA (or give you money for yours up to the yearly cap (approx 5300quid) or save into a regualr savings acct. Both of these types of accts are individua and cannot be held joint. And he should obv pay down his debt first before saving (apart from maybe a 100 or so for emergencies).

When you come back, do let us know what you chose.

Are you helping hub get debt free? If he needs some help or advice, send him to the debt free board ;-)