non tax payer, isa or other savings?

shazrobo

as a non tax payer, am i better off putting my savings into a high interest savings account other than a cash isa?
I'm asking as i usually put any spare cash into my isa but, think i've had a lightbulb moment lol, where i think my money might be better off elsewhere:rolleyes:

Aegis

Are you likely to become a taxpayer at some point? If so, then ISAs are a good idea where possible because that tax free benefit will really pay off when you start having to deduct income tax from your interest payments. If you get a head start on those tax-free accounts, you'll probably feel quite good about them eventually.

If you're unlikely to become a taxpayer, you can save in a high interest account instead and will probably get a better rate for it.

shazrobo

can't see me becoming a tax payer for at least four years. at the moment i'm on benefits, as i care for my two disabled twin lads. don't know what happens wen they turn sixteen

Aegis

You might well find that you get better rates as a non-taxpayer in high interest accounts then. Having said that, the top instant access ISA compares favorably with the top savings account, so it might be worth getting in there a little each year anyway.

Your call really, you seem to know what the pros and cons are.

isofa

If you are going to become a tax payer, even in 4 years, then it's probably worth using each year's allowance up, with ISAs like the NS+I paying 6.3%, it's on a par with other non-ISA accounts. And then when you become a tax-payer you'll have years worth of ISA savings, then still getting the gross tax-free rate, whereas interest on anything in standard savings accounts will then be taxed.

InMyDreams

Hmm, doesn't it depend a bit on the figures? If the OP is on benefits and caring for two disabled children, looking for somewhere to put spare cash, I'm assuming she is not in a position to even be thinking about "using each year's allowance up". Of course I could be way out here, but if she's unlikely to save up even the equivalent of one year's allowance within those 4 years (including possibly bringing in a partner's allowance if applicable) then I would imagine the best bet is go for the most suitable account regardless of whether it's got an ISA wrapper or not. As long as she has under one or even two year's allowance saved, she could get it all in an ISA very quickly in the future if necessary, with the benefit of any extra interest she's earned from a non-ISA account.

shazrobo

thanks for all your replies so far. i wouldn't be saving enough to use up all my tax free allowance in an isa, as i have said i am currently on benefits, unable to work due to caring for my sons.
just noticed the halifax do a regular savings account paying 7% think i might look into this further, as i am hoping to save at least £20 each month, for a rainy day, the kids future etc