NS&I tax free investments

ScarletBea

Thanks all for your replies.

I'm new to the uk, so I've been trying to navigate through the savings world, as they have so much better rates than my home country, even considering the higher tax rate.

I'm totally averse to risk, so nothing involving shares for me, hehe

It seems I'll put some money into NS&I things then.
At the moment I've done my cash ISA with NS&I, have the esavings acct at Natwest (my current acct bank) and I'm in the process of opening the Sainsburys eSavers (does it really take a month to verify my documents??).
Because of the foreign status and the fact that the electoral roll will only be updated in December, I'm trying not to go to many different things, because of the identity proof.

Biggles

ScarletBea wrote: »

Because of the foreign status and the fact that the electoral roll will only be updated in December, I'm trying not to go to many different things, because of the identity proof.

At the risk of going a bit off-topic, you should be aware that you can apply to go on the electoral register at any time. You don't need to wait for the routine annual form, just ring the council and tell them you've recently moved in and they'll send you one. I think it takes a month to take effect, so you'd gain about three months that way.

Barcode

Biggles wrote: »

At the risk of going a bit off-topic, you should be aware that you can apply to go on the electoral register at any time. You don't need to wait for the routine annual form, just ring the council and tell them you've recently moved in and they'll send you one. I think it takes a month to take effect, so you'd gain about three months that way.

Oh I did receive it and have filled it in, it's just that in the form it said that the roll would only be updated in December, so I assumed that it hadn't gone through yet.
Especially when both Sainsburys and NS&I requested forms instead of an electronic check.


Edit: sorry, it's me, ScarletBea, I just didn't change the log-in name from my partner, hehe

Mr_Mumble

If you're not currently using the mini-ISA stocks and shares component you could get a better return by buying gilts. Purchasing Index-Linked Gilts 2.5% 2013 will see a return of around 2% above RPI. Purchasing gilts is more complex than opening an NS&I account though!

cheerfulcat wrote: »

VCTs and EISs aren't really tax wrappers, though. They are tax-advantaged high-risk investments ( one of the risks being removal of the tax advantage! ). And the CTF is limited to children.

Think you're being overly harsh on VCTs there. Even 2nd hand they offer tax-free dividends and capital gains.

High risk? They're well diversified and up to 30% can be in non-qualifying investments. So, they're likely to give mediocre performance but unlikely to go completely down the tubes. What would you consider more risky:

1. A VCT run by Baronsmead or Close.
2. A FTSE-100 company called Northern Rock.

?!

cheerfulcat

Mr_Mumble wrote: »

Think you're being overly harsh on VCTs there. Even 2nd hand they offer tax-free dividends and capital gains.

High risk? They're well diversified and up to 30% can be in non-qualifying investments. So, they're likely to give mediocre performance but unlikely to go completely down the tubes. What would you consider more risky:

1. A VCT run by Baronsmead or Close.
2. A FTSE-100 company called Northern Rock.

?!

They are high risk by their very nature. Yes, bought second hand there are still some that look quite attractive but they lose one of the main tax advantages! And most of them are not run by Baronsmead or Close. Not suitable for most here, I feel.

Not really fair comparing a fund with a single share, btw, as obviously one share is far more risky than a portfolio.

ScarletBea

Oh gosh, all those options seem so complicated...

I'm completely averse to risk, and when people talk about "investing" vs "saving" I know they mean that the investment portion always has risk... The only place where I have more risk is in my pension applications (from my old job in switzerland and now with my current job in the uk), since it's still a good 30 years away.

So I'm sticking with the good bank accounts.
As I said, I have the Sainsburys eSavers, and I'm now thinking of opening a Yorkshire BS Regular Saver, seems quite good at 7.1%.

The rest I want to put in the NS&I tax-free, but what do you think is better, the index-linked or the fixed interest? If people are saying that the rates are probably going to go down, maybe the fixed one is better, eh?

isofa

The Index Linked Certificates are index-linking (based on the RPI inflation rate) + 1.35%, so if inflation goes up, the interest you receive goes up, if it goes down, then so does the rate. The change of the Bank of England base rate does not directly affect this, it's inflation that affects the "interest".

All discussed in detail at: http://forums.moneysavingexpert.com/showthread.html?t=528781

It's a thread worth reading ScarletBea.

The Fixed Interest Savings Certificates are just a fixed tax free rate, the 2 year issue is currently 3.95% and the 5 year issue 3.85%, (both tax free) so for the duration of the term, you'll get exactly the rate shown.

If you are a high-rate tax payer, the Index-Linked version is excellent.