What would you do?

nixinix

Thanks everyone - my 'big' problem is is that I am not very good at making money work for me - I feel I have done well that my only debt is my mortgage but I am not very savvy financially, interest rates confuse me - how do I calculate interest the money will earn? (maths is not my strong point unfortunately)

Basically my dad is downsizing and wants access to this surplus so he can 'treat' himself but anything I can 'make' on the money is mine. I am a lower tax rate payer (self employed but only earn pin money - out of choice at mo. as have very young children)

I don't want to have to keep moving these funds around and constantly monitor many accounts - one place would be good. So anymore suggestions would be gratefully received as I see the concensus is not to move my current mortgage at least until the end of the fixed rate.

nixinix

Any other thoughts?...

toonfish

To be honest the others have spelled it out pretty clearly - invest in the highest interest rate instant access account you can find and use the interest to subsidise your mortgage payment. Offset is fine until Dad wants his money back and you are stuck paying 6.5% or something.

JoeK_3

nixinix wrote: »

Thanks everyone - my 'big' problem is is that I am not very good at making money work for me - I feel I have done well that my only debt is my mortgage but I am not very savvy financially, interest rates confuse me - how do I calculate interest the money will earn? (maths is not my strong point unfortunately)

Basically my dad is downsizing and wants access to this surplus so he can 'treat' himself but anything I can 'make' on the money is mine. I am a lower tax rate payer (self employed but only earn pin money - out of choice at mo. as have very young children)

I don't want to have to keep moving these funds around and constantly monitor many accounts - one place would be good. So anymore suggestions would be gratefully received as I see the concensus is not to move my current mortgage at least until the end of the fixed rate.

This calculation is based on the Icici Bank UK HiSave No Notice Account Internet Only

£70,000 x 6.05% = £4,235 gross pa x 22% = £931.70 tax to pay
£4,235 gross interest - £931.70 basic rate tax = £3,303 pa or £275 pm

Hope this helps

JoeK

nixinix

Thank you toonfish. I can see what everyone is saying makes sense. And a really big thank you to JoeK. Seeing the figures really makes it make sense, as I said I'm not very adept at working out the figures for myself so that is really appreciated. At the moment I only earn less than £1000pa, so am I right in thinking I can use the rest of my tax allowance for this - at least until I earn more money anyway!!

JoeK_3

Based on a £1,000 pa you should get the whole interest paid gross. If you proceed, complete an IR85 form at the place where you eventualy decide to deposit the money.

JoeK

nixinix

Thank you JoeK - you have been really helpful.:T