where best to put my savings

atush

Zubo wrote: »

it does look like the general consensus seems to be to put the savings in high performing bank accounts.

Well they are paying more at present. But it can also depend on your tax rate. If you are paying 40%, then the current accts aren't quite as shiny.

And as you don't have a private or work pension this would be an obvious thing to explore. 80 into an ISa or savings acct is just 80. 80 into a pension becomes 100 immediately.

Does your employer have a pension, and how much do they pay in?

colsten

atush wrote: »

Exactly, If you close it yourself you lose ISA status.

Which might well pass the "So what?" test with flying colours.

atush

It matters if they pay HRT, and it matters if they dont have a pension (the money should be there if they have an emergency fund).

Current accts are paying the best at the moment, I agree. But some people dont have the time or inclination to faff abt with all that entails like the cashbacks, DDs and the moving money about.

I would and you would but not everyone would.

Zubo_2

thanks everyone for the interesting observations and comments.

My wife and I are both directors of my own company which is simply used to pay dividends when I secure an IT contract. I have just finished a stint for 8 months and have been resting for the last three months... I pay myself and my wife nothing. So I am pretty much semi retired.

Since my wife has a full time job we try to keep the total income for her including dividends below the 40% threshold.

Neither of us have a works pension... I have a tiny monthly annuity... thats pretty much it except for the two state pensions we get.

I guess our goal now that we have raised our family, had a good life with them, paid off the mortgage is to save as much as we can over the next two to three years and then really retire.

I dont see the point in keeping open isas which are not performing and currently do have time to faff around and set up a high performing bank account to maximize the interest. So... I am thinking of moving all the money we have to a Santandar 123 account, I think I can setup a monthly transfer of £500 from my wifes bank account and move two direct debits there to qualify.

Anyone see anything wrong with that or see a better way of doing this?

thanks

Looking at the one suggestion which seemed to suit us I am incllined

TCA

atush wrote: »

And as you don't have a private or work pension this would be an obvious thing to explore. 80 into an ISA or savings acct is just 80. 80 into a pension becomes 100 immediately.

As said above, you should give serious consideration to personal pensions. Even with no taxable earnings you can contribute £2,880 p.a. and it will be grossed up to £3,600

http://www.hmrc.gov.uk/incometax/relief-pension.htm#2

xylophone

The OP's wife has a full time job - is there no occupational pension?

Zubo_2

xylophone wrote: »

The OP's wife has a full time job - is there no occupational pension?

deducting and

actually i need to look at her payslip... not sure if the employer is deducting and contributing...

also i dont quite grasp how i create a personal pension... i do like theidea that the government tops up my £2800 by £800 .. that is a huge contribution... do i simply go to a personal pension provider and arrange to pay in £2800 over the year from my accumulated savings account with Santander?

Archi_Bald

Zubo wrote: »

do i simply go to a personal pension provider and arrange to pay in £2800 over the year from my accumulated savings account with Santander?

You do that, and you also have to invest the money into some fund or other. Choose one or more funds that have low costs, and also a provider who offers low cost.

Here are some ideas about providers: http://www.telegraph.co.uk/finance/personalfinance/investing/sipps/10607824/DIY-pensions-The-cheapest-Sipp-fund-supermarkets.html

And here some about what to invest in: http://monevator.com/category/investing/passive-investing-investing/

atush

Zubo wrote: »

deducting and

actually i need to look at her payslip... not sure if the employer is deducting and contributing...

also i dont quite grasp how i create a personal pension... i do like theidea that the government tops up my £2800 by £800 .. that is a huge contribution... do i simply go to a personal pension provider and arrange to pay in £2800 over the year from my accumulated savings account with Santander?

What you can do is make your company a LC. And set up an executive pension where the company pays your pension contribs direct.

Or if wanting to stay as is, pay yourself some salary instead of all divs and then put the lot into a personal pension.

Zubo_2

atush wrote: »

What you can do is make your company a LC. And set up an executive pension where the company pays your pension contribs direct.

Or if wanting to stay as is, pay yourself some salary instead of all divs and then put the lot into a personal pension.

First... my wife has no occupational pension arrangements...

Second ... the company only earns money when I have a contract.. Dividends is the most tax efficient way of getting money out... if I were to pay a salary then even though I as the employee over 65 do not pay NI, the business is liable for the employer contributions...