A Little advice re savings please....

JAMIEDODGER

hi all,

my debts currently stand as per my signature. My overdraft will be cleared by end of feb at latest. Once it is, as i cannot overpay on my loan i will be saving to pay it off in full.

I am a non tax payer. From as best as i can see, from April 2007 i will be able to save £700 per month.

this is what i was thinking:

child benefit into my coventry child benefit account: £227.71 per month 6.25% this money will be used to cover all annual expenses christmas/birthdays/school expenses/car and clothing

saving 250 per month into a lloyds reg saver (although i cannot afford to put 250 in during march but do want to open it before it stops altogether.

which leaves me with 222.29 per month left to save and this is the money i intend saving to pay back my loan. i dont have an isa currently so am free to open one in the new tax year.

i have about 2700 left to pay on the loan, it would take me a year to pay this back if i paid 222.29 a month.

im in a bit of a quandry about what to do. any suggestions?

climbgirl

If you don't have an ISA that seems like the logical place to put it...I'd wait for all the banks to respond to the latest rates rise before choosing the best buy (although if you're not getting going until Feb that shouldn't be a problem).

mustafa_say_ving

Hi jammie,

If you're a non tax payer you shouldn't be paying any tax on your interest from your savings. You'll need to fill out a R85( I think that's the right from ) and ensure you give one to each bank or BS you have savings with.
Here's a link to the form from HMRC website

http://www.hmrc.gov.uk/forms/r85.pdf

tyllwyd

If you are a non-taxpayer, is there any benefit in putting your money in an ISA, especially if you aren't planning to keep the money in there for more than a year? Wouldn't it be best just to look for the account with the best interest rate?

JAMIEDODGER

thats what i was thinking tyllwyd:)

thats why i was looking at lloyds reg saver and i forgot to say i have a hisave account too

i could lower the monthly commitment to lloyds while i am paying back the loan and then after its paid off up to 250??

what does everyone think?

jamie

climbgirl

Are you able to change monthly amounts to regular savers? I thought the monthly amount had to be consistent? (Don't know the details on the Lloyds one though).

To be honest, if you're only saving for a year and aren't a tax-payer then go for the highest rate, ISA or non-ISA. However, are you likely to stay a non-taxpayer for long (you've mentioned you've started a business on other forums). If not, I'd consider getting the ISA allowance going for long-term savings...

JAMIEDODGER

hi climbgirl and thanks:)

yes i have my own business, i started up in august 06. i havent yet taken a wage from it. we live off our tax credits and child benefit and disability allowance.

dependant on how this year proceeds will determine whether i take a wage or not from this august, but even if i do it will be a tiny one. the business is still in its infancy atm and every penny made gets ploughed back in so in answer to your question, i will probably stay a non tax payer for at least another 18 months...maybe more.

i really want this loan cleared, but also want to save to cover expenses as in my original post.

i am almost sure you can change the amount monthly with the lloyds reg saver...will someone correct me if im wrong please:)

im thinking what i may do is pay £25 per month into the reg saver and then shove everything else in my hisave account until i have enough to clear the loan excluding what i need to save to cover those expenses.

i have done some calculations and could be clear of the loan by july 07. then i could open up the isa and fill that up after the loan has gone (and still be in this tax year, once thats full, then up the amount into the lloyds account til next april.......then do the isa again.

i do see your point about tax free long term savings, does this seem a better idea? i really dont want to touch my isa savings once i have put it in.

jamie

JAMIEDODGER

hi climbgirl and thanks:)

yes i have my own business, i started up in august 06. i havent yet taken a wage from it. we live off our tax credits and child benefit and disability allowance.

dependant on how this year proceeds will determine whether i take a wage or not from this august, but even if i do it will be a tiny one. the business is still in its infancy atm and every penny made gets ploughed back in so in answer to your question, i will probably stay a non tax payer for at least another 18 months...maybe more.

i really want this loan cleared, but also want to save to cover expenses as in my original post.

i am almost sure you can change the amount monthly with the lloyds reg saver...will someone correct me if im wrong please:)

im thinking what i may do is pay £25 per month into the reg saver and then shove everything else in my hisave account until i have enough to clear the loan excluding what i need to save to cover those expenses.

i have done some calculations and could be clear of the loan by july 07. then i could open up the isa and fill that up after the loan has gone (and still be in this tax year, once thats full, then up the amount into the lloyds account til next april.......then do the isa again.

i do see your point about tax free long term savings, does this seem a better idea? i really dont want to touch my isa savings once i have put it in.

jamie

JAMIEDODGER

hi climbgirl and thanks:)

yes i have my own business, i started up in august 06. i havent yet taken a wage from it. we live off our tax credits and child benefit and disability allowance.

dependant on how this year proceeds will determine whether i take a wage or not from this august, but even if i do it will be a tiny one. the business is still in its infancy atm and every penny made gets ploughed back in so in answer to your question, i will probably stay a non tax payer for at least another 18 months...maybe more.

i really want this loan cleared, but also want to save to cover expenses as in my original post.

i am almost sure you can change the amount monthly with the lloyds reg saver...will someone correct me if im wrong please:)

im thinking what i may do is pay £25 per month into the reg saver and then shove everything else in my hisave account until i have enough to clear the loan excluding what i need to save to cover those expenses.

i have done some calculations and could be clear of the loan by july 07. then i could open up the isa and fill that up after the loan has gone (and still be in this tax year, once thats full, then up the amount into the lloyds account til next april.......then do the isa again.

i do see your point about tax free long term savings, does this seem a better idea? i really dont want to touch my isa savings once i have put it in.

jamie

JAMIEDODGER

stupid stupid computer arghhhhhhhhhh