Help Needed for a youngster

oliveoyl

Hi again Tom

I'd say 3 or 4 accounts to start with sounds ok. A current account, an ISA, a savings account and maybe a regular saver.

The £320 you are going to be saving each month, does that include the £166 that you plan to put into your ISA each month, or is that on top?

wiseman405

I will save. £166 a month in the ISA (that is a total of £2000 throughout the year) But i already have £1000 in the ISA because of the deposit.

Then I will put £320 a month into the HSBC.

So total savings each month will be: £486 + Interest

Thanks
Tom

oliveoyl

With the ISA, you ideally want £3,000 in there by April 5th next year because the allowance is for the Tax Year, which runs 6th April 2007 to 5th April 2008. If you’re planning on not touching the money for a few years, then it’s more beneficial to make sure you use up your ISA allowance before looking at other accounts, even if the other accounts appear to pay a higher rate… over a few years it wouldn’t work out that way because of the tax breaks (you do need to review your ISA every year to make sure you’re still getting the best rate with whichever company you’re with, and if you’re not, you can switch…but remember not to take any money out, switching is different, if you take money out, you can’t put it back again, even in a new one).

So, if you’re starting monthly payments at the beginning of October, it’ll be 7 payments of £285 (and some pence) to fill your ISA up by the beginning of April.

Then, if it were me, I’d open a regular saver and set up a standing order to pay in the remaining £200 of your monthly savings, and just use your ordinary HSBC savings account to pay in any extra cash you have just as and when.

djbd1973

oliveoyl wrote: »

With the ISA, you ideally want £3,000 in there by April 5th next year because the allowance is for the Tax Year, which runs 6th April 2007 to 5th April 2008.

From what I have been reading as well, the yearly ISA amounts are being increased too to £3600 this April.

(I like your pot noodle suggestion and your version sounds like it has more flavour than the originals!)

wiseman405

Oh. So it has to be filled by April of next year?

That should be fine. Thanks for that

My current account is with Natwest, and i will just keep that the same for my wages etc.

My ISA is obviously for my future. And i will max that out every year

And my HSBC savings account is for the rest of my money to go into.

whats a regular savings account?

Thanks
Tom

oliveoyl

Yes, by the 5th April every year... they don't let you carry your allowance over so it's important you remember that date.

Have a look here for Martin's article on regular savers: http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

wiseman405

Just been looking at the Halifax Regular saver http://www.halifax.co.uk/savings/regularsaver.asp

5.6% net. But it only last a year. Would i be able just to reopen it at the end of the year? Or i suppose i could transfer all that money into my ISA? and then cut down on the monthly payments and put the other money back into a high interest saver?

What happens at the end of each year with teh ISA's. Does the money carry forward to the next tax year? So if i got £3000 by april and i received £100 in interest. Does the £3,100 carry over to next year and i can carry on putting my monthly standing order in? Or do i have to take that money out and put it into a new ISA. My mum at the moment has an ISA and every year she can put £3000 in, but that is on top of last years money.

Thanks
Tom

wiseman405

Arrr. After reading through the terms of the halifax regular saver. I understand it now After the year is up i have to choose a product to transfer my money into.

This seems to be the highest interest rate

http://www.halifax.co.uk/savings/variablewebsaver.asp

That account seems good, the regular savers one. Then after put my money into that one above. seems ok in my opinion. I dont think i will bother with the HSBC. Seems pointless. And i wont be able to afford to put anything in it, if i am putting £285 into an ISA every month and £200 into the Halifax account. i wont have enough disosable income to put into the HSBC

Thanks
Tom

oliveoyl

You won't be able to open the same one again, but you'll be able to open a different one for another year and carry on that way.

Yes, transferring the lump sum to your ISA and re-arranging your payments sounds like a good plan. As time goes on, you'll need to keep re-assessing your finances and interest rates to make sure you're still getting the best deals.

The money in your ISA does carry forward, along with interest. At the beginning of a new tax year, you can either carry on paying into the same one, switch provider and transfer your ISA, then carry on paying in to it, or leave your old one as it is and open another with a new provider. You can only pay in to one ISA per tax year. NEVER take money out of an ISA if you intend to carry on saving... to transfer, you need to fill in forms and the bank/building society do the rest, if you take money out, you can never put it back.

e.g. If you had already paid £3,000 in to your ISA this year, and then taken £1,000 out, you couldn't then pay the £1,000 back in. The allowance is the total amount your are allowed to pay in during the year.

Here's more information about them http://www.moneysavingexpert.com/savings/best-cash-isa

oliveoyl

wiseman405 wrote: »

Arrr. After reading through the terms of the halifax regular saver. I understand it now After the year is up i have to choose a product to transfer my money into.

This seems to be the highest interest rate

http://www.halifax.co.uk/savings/variablewebsaver.asp

That account seems good, the regular savers one. Then after put my money into that one above. seems ok in my opinion. I dont think i will bother with the HSBC. Seems pointless. And i wont be able to afford to put anything in it, if i am putting £285 into an ISA every month and £200 into the Halifax account. i wont have enough disosable income to put into the HSBC

Thanks
Tom

You don't have to keep the follow on product... after the year is up, the regular saver has closed and your money is transferred into another account, you can take your money out of the new account and put it somewhere else.