won 10k!

metuka

I have just won 10 grand on a bingo site and I have no idea what the best thing to do with the money is!

I am currently a student in my last year of university and I have a current account (lloyds)with roughly 2-3k in it which i use for rent and day to day etc plus i have a small part time job.

should i split up the money in to different accounts or ISA's or keep in one savings account - help - seriously got no idea and there is so much advice on this website - its confusing,
thanks in advance!

Aegis

As you're going to be graduating and incurring a fair few expenses when you get a job and such, the best bet would probably be to save it all in high-interest accounts. If you haven't used your £3k ISA allowance, that would be useful heading into your working life even though at the moment the benefits are probably not that great.

If you look into the best available ISA rates, you should be able to find something over 6% tax free, which is a good start for some of your money if that interests you.

The rest should probably be in a high interest savings account like Icesave or ICICI, both of which are offering about6.3-6.4% gross. If you're currently earning less than your annual tax allowance (i.e. if you are a non-taxpayer) you can apply to have the interest from these accounts paid gross until you are earning enough to require deduction of income tax at source.

If you were thinking of something else, feel free to ask follow-up questions.

SkipClick

metuka wrote: »

I have just won 10 grand on a bingo site and I have no idea what the best thing to do with the money is!

I am currently a student in my last year of university and I have a current account (lloyds)with roughly 2-3k in it which i use for rent and day to day etc plus i have a small part time job.

should i split up the money in to different accounts or ISA's or keep in one savings account - help - seriously got no idea and there is so much advice on this website - its confusing,
thanks in advance!

Which bingo site did you use?.

metuka

thanks for that advice - just to clarify before I do this then - you suggest i put 3k in an ISA and the rest in a high interest savings account

aren't these the same things? can you give me an example of both.

am i able to access money from them both if necessary?

sorry, this is not my forte!

thanks.

Blondie32_2

Hi,

Well done on your win. Your not waytaz by any chance from the same site I am playing at right now. I dont have luck like yours though.

metuka

no, im not waytaz. my suggestion if you havent won already is to stop now - i got a bit addicted and even lost a bit f the original win!
the site i used was https://www.jackpotjoy.com
good luck with yours though - hope ur not losing too much!

Aegis

metuka wrote: »

thanks for that advice - just to clarify before I do this then - you suggest i put 3k in an ISA and the rest in a high interest savings account

aren't these the same things? can you give me an example of both.

am i able to access money from them both if necessary?

sorry, this is not my forte!

thanks.

A cash ISA is a specific form of savings account that is and will remain tax free indefinitely. While you might be able to claim your interest gross at the moment, this tax free savings account will still be getting tax free interest if you keep it until you're earning £150000 pa.

A normal savings account deducts income tax of 20% at source and higher rate taxpayers would be liable to a further 20% of the gross. Lower rate and non-taxpayers can reclaim their money from such accounts, but it can be a hassle and you will only be allowed to do so for as long as your earnings are below the next income band.

You should be able to access your savings equally easily from any instant access savings account, ISA or otherwise, so that's not likely to be much of an issue. Just stay clear of notice accounts if you really want to be sure that you're ok to access your money when you want it.

Your ISA allowance this year is £7000, but a maximum of £3000 of this can be in a mini cash ISA or the cash component of a maxi ISA. The rest would have to be used for investments, which I'm not sure you're interested in just yet!

The cash ISA allowance will go up to £3600 next year, so if you put in £3k now and £3600 in April, you'll have a nice tax-free nest egg for after you graduate!

jamesd

A cash ISA is limited to a maximum of 3,000 paid in each year across all institutions, rising to 3,600 from April 2008. Cash ISAs pay interest free of tax so they are usually the best long term savings choice for cash.

Since it's not possible to use a cash ISA for all of the money that leaves other high interest accounts as the next best cash option.

If you have other income sources so you don't think that you'll need to spend the money for a few years you could also look at investing via a stocks and shares ISA. See Ok then - How do I choose a S&S ISA to get an idea of what a sector allocation is and the practicalities of using S&S ISAs. The S&S ISA paying in limit this year is 4,000 if you've used any cash ISA or 7,000 if no cash ISA. From April 2008 it'll be a total of 7,200 split however you like between cash ISAs and S&S ISAs.