Advice on what to do...

Miss_Ratty

Hi All,

Basically, I opened a Halifax Direct Reward ISA in June (3% AER), but heard nothing until a few weeks ago when I was told that they couldn't verify my identity and could I go into a branch with documents. I had almost forgotten about it as I was still paying my IPA post-bankruptcy and my final payment was a few months ago - so I had just been putting my surplus pay into my other savings account.

It's now getting to the end of the financial year and I don't really understand ISAs too well, but here's the thing. I won some money recently and coupled with my savings since my IPA finished, I have about 3k (I have turned into a bit of a miser after becoming bankrupt so young!).

I don't know whether to forget about the Halifax ISA and just leave my savings in my other account, and then open a new ISA in April to put my surplus in. Or whether to put it all in my Halifax ISA (once they have sorted the identity thing!) now and open anpther new one in April. The issue is that although there was a 12 month guarantee on the interest at the time I opened (June), I really don;t know how that works - do they pay that rate until June or just until the end of the financial year? I also can't find any info on their website about the interest rate once that period ends.

Does anyone know what I'd be better off doing?? Your expert advice would be greatly appreciated as the whole world of savings and even being able to save is really new to me!!!

middlepuss

Sorry, can't answer your specific question, but just wanted to say welcome to the world of saving. As you've found out the hard way, saving is a very simple matter of spending less than you earn.

If you're saving for the long term, don't keep all your savings in cash. Put some in, say, an index tracker unit trust. Cash is very risky in the long term as it tends to lose real value because of inflation: what will £100 buy when you reach retirement age? Cup of Starbucks maybe?

Miss_Ratty

Thanks so much! Saving feels much better than spending I have to say - but I find it hard to part with the hard-earned now!

I guess I'm not really saving for any particular length of time, or for any purpose other than perhaps being more secure and being able to move house to a larger one if hubby and I start a family - but then again we may not need to move. Truth be told, I loved Count Duckula as a child and would one day love the swimming pool of money!!!

xylophone

Go into the branch with the required documents and ask - it seems to me a good idea to try to fill your current ISA then start the best paying regular savings ISA in April?

atush

If you are a taxpayer, then put the money in an ISA to shelter the interest from tax. If you aren't getting 3%, transfer it to somewhere that will.

After you have saved up 6 months savings in cash (ISA as much as poss) then look at equities such as a S&S ISA. And join a pension if you haven't.

Miss_Ratty

Oooh - thanks so much, I definitely will. So does anyone know if the 3% without paying tax is for 12 months from opening or only until the end of the financial year? I can't get to a branch for a few weeks because of work and where I live so very curious. I guess I could ring them! I do have a pension already...one of those "gold plated" (I wish!) public sector ones!!! I've had that since I started so not too worried about my pension, but definitely need to learn more about savings!

atush

there is a list of the best pying ISAs here ont he site (links at the top) and you can open one, or at least look them up and decide which one online.

xylophone

Miss_Ratty wrote: »

Oooh - thanks so much, I definitely will. So does anyone know if the 3% without paying tax is for 12 months from opening or only until the end of the financial year? I can't get to a branch for a few weeks because of work and where I live so very curious. I guess I could ring them! I do have a pension already...one of those "gold plated" (I wish!) public sector ones!!! I've had that since I started so not too worried about my pension, but definitely need to learn more about savings!

http://www.halifax.co.uk/savings/interest-rates/personal-rates/previous/#ISADR

atush

Dont kid yourself.

Your pension still is better than anyone outside the public sector unless they are say a company director or something. And sometimes even then.

AFAIK, the 3% is for year from date of opening. Seperately, you can open a different one in april in the new financial yearl.