Where to start when you have no money!??

psychic_teabag

indie80 wrote: »

You can claim the tax back on a joint account even if one of you has to pay it, you just get 50% of it back. I read that some banks will allow you to register so that it only deducts 50% of the tax others would require you to claim a rebate at the end of the year.

Halifax don't consider the reward to be interest, so you can't register to receive it tax-free. Have to claim back the tax afterwards.

psychic_teabag

L011ip0p wrote: »

since the age of 16 i put my money in lloyds n haven't thought about it since!

Some banks are giving incentive payments (eg £100) if you switch your current account to them. But switching current accounts can be a bit of a hassle if something goes wrong (eg your salary goes missing for a few days).

I think some require that you move your salary, others just require that you move some direct debits or something. Not sure.

L011ip0p

yea ive got a classic current account... use the 1000 i have? u mean take it in and out again every month??

My husbands with barclays, i was just looking at maybe transferring our isa. they do an isa at 2.25% but then they do a regular savings account at 3.25%.. but i suppose u get taxed on the latter so probably works out better to have the isa???

Another option is putting it into an investment isa... do they have a minimum ammount you can invest? would the accept my lil 1000!!? again i saw barclays low risk one said you can get 15 - 20%??
Are they worth thinking about or is the market still to risky at the mo?? I cant afford to lose money

psychic_teabag

Sorry, I've lost track of where we'd got to.

You have a current account with Lloyds. You can have the "vantage" feature enabled on it, then you can earn interest on any money in there. See the 'interest' tab at http://www.lloydstsb.com/current_accounts/classic_and_classic_plus_accounts.asp I'm not aware of any downside to enabling vantage - don't know why you have to ask for it and why it's not the default.

If you open a Halifax reward current account, you can earn £5 per month. Your husband can also open one of these. There is no need to make this your "default" current account by moving your salary or anything - it's just an account.

Then once a month, send £1000 to the Halifax account, then to your husband's reward account, then to the lloyds account. That will earn 2x£5 from Halifax plus satisfy the vantage interest requirements. (This is the same £1000 just making a circuit.) This could either be your £1000 savings, or from your income before you pay your bills, or whatever. Or you could send £500 round the circuit twice.

If you are using your savings, you could leave it in Lloyds for the rest of the month, getting 2% interest, or could move it to, say, a Santander esaver at 3.1%. Note, if you are using your savings for this, you don't want to use an ISA : you can't take £1000 out and into an isa each month since it will quickly consume your allowance.

Eco_Miser

L011ip0p wrote: »

yea ive got a classic current account... use the 1000 i have? u mean take it in and out again every month??

Yes, as Psychic Teabag has now explained. If you were low on cash you could theoretically move £50 round the circuit 20 times.

L011ip0p wrote: »

My husbands with barclays, i was just looking at maybe transferring our isa. they do an isa at 2.25% but then they do a regular savings account at 3.25%.. but i suppose u get taxed on the latter so probably works out better to have the isa???

3.25% less 20% tax is still 2.6% so better than the ISA. But if you don't pay tax, and I think you don't, you keep the full 3.25% - but regular savings accounts are for regular savings, great if you can afford to put away a regular amount each month from your income; it's possible to fund one by monthly transfers from a savings account, but scarcely worthwhile in actual extra money gained unless you have £3000 or more.

L011ip0p wrote: »

Another option is putting it into an investment isa... do they have a minimum ammount you can invest? would the accept my lil 1000!!? again i saw barclays low risk one said you can get 15 - 20%??

15-20% is unbelievably high unless they mean the total return over 5-7 years, in which case they are talking about a structured product, which should be avoided. Read other threads on this forum for the consensus of opinion on taking investment advice from banks.

L011ip0p wrote: »

Are they worth thinking about or is the market still to risky at the mo?? I cant afford to lose money

I was told last week, by a Financial Advisor trying to sell me an S&S ISA, that you should have £10,000 ready cash (ie savings accounts, savings certificates, and the like) before considering a Stocks & Shares ISA. Certainly you should have about six months expenditure readily available before you even think about tying your money up. And never put money you can't afford to lose into Shares - you could lose the lot (see Northern Rock, Bradford & Bingley, Lloyds.)


If I've got my figures right, you can earn a further £1000+ before you pay tax, which is the interest on £33,000 @ 3%, so there is no point in you using an ISA unless you are expecting a massive increase in income over the next few years.

With vantage, your Lloyds current account pays at the rate of 1.5% per year for each day you have a balance less than £1000, 2% for balances from £1000 to £3000, and 3% for balances between £3000 and £5000, so it's worthwhile keeping the balance over £1000 (or £3000) as much as you can - as the money builds up this will happen more often - unless you decide to go to Santander for 5% (but read the Santander threads and choose wisely.)


Also, read the Saving small amounts in 2012 thread. and The 'Save £12k in 2012' thread! for inspiration.

psychic_teabag

Eco_Miser wrote: »

With vantage, your Lloyds current account pays at the rate of 1.5% per year for each day you have a balance less than £1000, 2% for balances from £1000 to £3000, and 3% for balances between £3000 and £5000, so it's worthwhile keeping the balance over £1000 (or £3000) as much as you can

(provided you also pay in £1000 per month, as above.)

But if you have less than £3000 it's still better to keep it in an online instant-acces savings account : there are several available which will pay 3% or more on any balance from £1 upwards. And most allow money to be transferred (almost) instantly to/from your current account.

But it depends how complicated you want to make things : some on here are happy to ping money around at the drop of a hat to earn a few extra pennies, but some are happy to compromise some of the pennies to keep life relatively simple.

margaretclare

I was told last week, by a Financial Advisor trying to sell me an S&S ISA, that you should have £10,000 ready cash (ie savings accounts, savings certificates, and the like) before considering a Stocks & Shares ISA. Certainly you should have about six months expenditure readily available before you even think about tying your money up. And never put money you can't afford to lose into Shares - you could lose the lot (see Northern Rock, Bradford & Bingley, Lloyds.)

Ooops. I'm very glad indeed that I never encountered that particular IFA! I might have been discouraged from doing anything at all and been like so many people of my age-group - whingeing about having money in low-paying savings accounts.

I read an article many years ago about 'how to become rich from small beginnings'. It was about putting in small amounts on a regular basis and letting it grow. Not individual shares - unit trusts, or what have now become S&S ISAs.

I despaired of any cash savings accounts, even ISAs. I've been putting regular monthly amounts into a S&S ISA. I'm amazed at what this has risen to. More money than I ever imagined I'd have, and I don't need it, it can stay as it is and carry on growing. But according to that IFA, it was the same amount that he says I needed to start with!!

PS: I admit to being fortunate in many ways. I'm retired and I know my income will never disappear, which a younger person has to worry about.

margaretclare

To L011ip0p: Have a look at this: http://www.fool.co.uk/10steps/step1.aspx?source=uhpsitts0000001

Then read some of their other guides as well.

Eco_Miser

margaretclare wrote: »

Ooops. I'm very glad indeed that I never encountered that particular IFA! I might have been discouraged from doing anything at all and been like so many people of my age-group - whingeing about having money in low-paying savings accounts.

No 'I', just FA, and I got the impression that the £10,000 was a message from the Regulator.

atush

margaretclare wrote: »

Ooops. I'm very glad indeed that I never encountered that particular IFA! I might have been discouraged from doing anything at all and been like so many people of my age-group - whingeing about having money in low-paying savings accounts.

I read an article many years ago about 'how to become rich from small beginnings'. It was about putting in small amounts on a regular basis and letting it grow. Not individual shares - unit trusts, or what have now become S&S ISAs.

I despaired of any cash savings accounts, even ISAs. I've been putting regular monthly amounts into a S&S ISA. I'm amazed at what this has risen to. More money than I ever imagined I'd have, and I don't need it, it can stay as it is and carry on growing. But according to that IFA, it was the same amount that he says I needed to start with!!

PS: I admit to being fortunate in many ways. I'm retired and I know my income will never disappear, which a younger person has to worry about.

I started saving this way many years ago when money was tight. I started off with just 20 quid per month into an investment trust savings plan. Then, when I had more, 50 into another etc. And from small beginnings grew large pots.