Pensioner with a few bob

tenpin369

I am 76 years young and I am looking forward to having a few more. Not certain if my money is working as good as it could do.
Here are the details.
Appox £150,000+ in a bank account (HBoS)
Still drawing a £30,000 salary from the family business...come on.. I did start it!!
...anyway...
No mortgage on £200,000 house, expensive shopping habits, 3 sons, 4 grandkids with expensive needs!
£123/week state pension..no other pension.
Paying higher rate tax on all of this
Need to make my money work a wee bit harder, if that is possible, particularly with grandchildren

All suggestions welcomed.
Thank you.

wombat42_2

tenpin369 wrote: »

I am 76 years young and I am looking forward to having a few more. Not certain if my money is working as good as it could do.
Here are the details.
Appox £150,000+ in a bank account (HBoS)
Still drawing a £30,000 salary from the family business...come on.. I did start it!!
...anyway...
No mortgage on £200,000 house, expensive shopping habits, 3 sons, 4 grandkids with expensive needs!
£123/week state pension..no other pension.
Paying higher rate tax on all of this
Need to make my money work a wee bit harder, if that is possible, particularly with grandchildren

All suggestions welcomed.
Thank you.

Make sure you have set up a tax free cash ISA (National Savings probably best) also National Savings Certificates are tax free. Put rest of savings in hi interest account (ICICI, ICESAVE or Sainsburies).

jem16

wombat42 wrote: »

Put rest of savings in hi interest account (ICICI, ICESAVE or Sainsburies).

And lose 40% of the interest to tax?

I would really advise seeing an IFA with that level of money and income.

Jonbvn

The key is to get below the 40% tax limit ASAP.

Put 30k of your savings into index linked savings certs immediately. They are completely tax-free. You can put 60k a year into these (2 issues per year each at 3 & 5 year maturity). Continue to do this for every issue of the saving certs until you move the majority of your savings into them.

Put 3k of your savings into a cash ISA and 3.6k next year.

Consider reducing your salary, such that your total income is below the 40% tax limit (currently 34.6k per annum). Each year, as you move your savings into tax-free saving certs, you can increase your salary such that your income is just below the 40% tax limit.

StevieJ

Jonbvn wrote: »

The key is to get below the 40% tax limit ASAP.

Put 30k of your savings into index linked savings certs immediately. They are completely tax-free. You can put 60k a year into these (2 issues per year each at 3 & 5 year maturity). Continue to do this for every issue of the saving certs until you move the majority of your savings into them.

Put 3k of your savings into a cash ISA and 3.6k next year.

Consider reducing your salary, such that your total income is below the 40% tax limit (currently 34.6k per annum). Each year, as you move your savings into tax-free saving certs, you can increase your salary such that your income is just below the 40% tax limit.

The higher rate starts at £39,825 ( 34600+5225) so I reckon you should get under the HR limit with the use of tax free indexed linked NS&I certs although you have to hold these for at least 12 months to earn interest.

EdInvestor

tenpin369 wrote: »

Still drawing a £30,000 salary from the family business...come on.. I did start it!!

Can you take a dividend from the company instead of a salary?

Dividend income comes with a tax credit which means there's no more tax to pay for someone on basic rate.

Your company accountant ought to be able to sort this out for you.