Nationwide 5% v Pension contribution v Stocks & shares ISA v Cash ISA

spexs

Not quite sure where to ask this question so settled on this board.

I'm a higher rate taxpayer but OH is not. Opened 3 Nationwide flex accounts in her name to try and get 5% on all of them. However they have written to us pointing out the Ts&Cs and stating only 1 qualifies for the 5%. So now wondering what do do with the £5,000. Options appear to be:

1. Put in a cash ISA (rates not very good)

2. Invest in S&S ISA but where to invest?

3. Make a contribution to my Personal Pension. Taking into account tax relief my £5,000 contribution becomes £6,250 into my fund at a cost to me of £3,750.

Anyone got any thoughts what to do, anything I should consider further or any other ideas for my £5k?

opinions4u

3. Make a contribution to my Personal Pension. Taking into account tax relief my £5,000 contribution becomes £6,250 into my fund at a cost to me of £3,750.

Why wouldn't it be £8,333.33 at a cost of £5,000?

The three options posted are pretty diverse.

Does either of your employers match pension contributions?

Does either employer offer any sort of share purchase scheme with matching funds?

Have you considered BOS, TSB, Lloyds, Santander accounts paying 3%?

Do you have a sensible contingency fund in place?

spexs

opinions4u wrote: »

Why wouldn't it be £8,333.33 at a cost of £5,000? My cash £5,000 plus 20% (5,000/80%*20%) basic rate tax relief = £6,250
The three options posted are pretty diverse.

Does either of your employers match pension contributions? No

Does either employer offer any sort of share purchase scheme with matching funds? No

Have you considered BOS, TSB, Lloyds, Santander accounts paying 3%? I undertstand the 3% only kicks in on balances over £3k

Do you have a sensible contingency fund in place?

If 9 months salary is sensible then yes.

kidmugsy

How old is your OH?

xylophone

I'm a higher rate taxpayer

http://www.hmrc.gov.uk/incometax/relief-pension.htm

http://www.thisismoney.co.uk/money/pensions/article-2440040/Higher-rate-taxpayers-miss-230m-pensions-tax-relief.html

spexs

kidmugsy wrote: »

How old is your OH?

fifty eight.

spexs

xylophone wrote: »

http://www.hmrc.gov.uk/incometax/relief-pension.htm

http://www.thisismoney.co.uk/money/pensions/article-2440040/Higher-rate-taxpayers-miss-230m-pensions-tax-relief.html

Sorry missing the point here.

le_loup

You are being invited to read the articles and draw a conclusion.

YorkshireBoy

spexs wrote: »

Sorry missing the point here.

You also appear to have missed, or chosen to ignore, 4 of the 5 questions posted by opinions4u.


But back to basics...why not open a FlexDirect in your own name, close one of your wife's, and convert one of her others to a joint account?


That way, 'you' will get 4% net on her account, 3.5% net on the joint account, and 3% net on your new account (assuming she's a basic rate tax payer?).


And then worry about what to do next when the introductory periods are about to expire.


My reasoning being you were perfectly happy before with your money in a zero risk vehicle. The difference isn't much on £5K (£3 a month less?) so why rock the boat?

spexs

le_loup wrote: »

You are being invited to read the articles and draw a conclusion.

Done. Thank you.

spexs

YorkshireBoy wrote: »

You also appear to have missed, or chosen to ignore, 4 of the 5 questions posted by opinions4u.

I answered all of them but seemed to get them in the wrong place. I've gone back and edited them and they are now in red. Apologies.


But back to basics...why not open a FlexDirect in your own name, close one of your wife's, and convert one of her others to a joint account?


That way, 'you' will get 4% net on her account, 3.5% net on the joint account, and 3% net on your new account (assuming she's a basic rate tax payer?).


And then worry about what to do next when the introductory periods are about to expire.


My reasoning being you were perfectly happy before with your money in a zero risk vehicle. The difference isn't much on £5K (£3 a month less?) so why rock the boat?

Fair comment. Thanks. But the pension benefit is an attraction £6,250 for £3,750.