100k to save

Hi folks
My OH will receive 135k next week. 35k is taken care of including an income for the next year. So from Aug 08 we are looking for 12-15k per annum for 5-7 years. I am a non tax payer so most will go in my name. Initially would it be best to put all in the tesco instant at 6.75 for six months, (still within my tax allowance) and then start shifting it around (where?).OH trusts me but he would like some in his name at some point!:D Cheer s in advance

Replies

  • isofaisofa Forumite
    6.1K Posts
    100K with 6.7% gross interest will only yield (obviously) £6700 a year, so unless the other 35K is generating a similar amount of interest, not sure how you'll get that return unless you look at funds, the stock market and property.

    There are good fixed rate bonds at 6.7% gross, without catch bonuses (I hate catches and having to constantly shift money around, but everyone is different!).

    The interest will probably push you into a low rate tax band as you'll exceed your personal allowance, so tax efficient savings will need to be reviewed.

    If you are under 65, your personal allowance will be £5225, so generating £6700 of interest ("income") will mean you'll have to declare the interest and pay tax on £1475!

    Hope that helps!
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