What to do with £18,000 for a year

Alexland

gemmacampbell2019 wrote: »

Yes I do believe I meet the criteria for the LISA, but again I am limited to the £4000 per annum.

£4k per tax year so over the next month you could bang in £8k for £2k of bonuses.

Alex

Squirrelz92

Alexland wrote: »

£4k per tax year so over the next month you could bang in £8k for £2k of bonuses.

Alex

Ooooohhhh could I actuallt do that? Just open that account, whack £4000 in, take that back out and redo it on the 6th April?! That's insane if so!!:T:T

Alexland

gemmacampbell2019 wrote: »

Ooooohhhh could I actuallt do that? Just open that account, whack £4000 in, take that back out and redo it on the 6th April?! That's insane if so!!:T:T

No you cannot take it out without penalty unless you are either making a qualifying property purchase or get to age 60. However you can add £4k in the last few days of this tax year then a further £4k at your convenience next tax year. Some people prefer to leave it towards the end of the tax year to get more interest elsewhere.

Alex

Squirrelz92

Alexland wrote: »

No you cannot take it out without penalty unless you are either making a qualifying property purchase or get to age 60. However you can add £4k in the last few days of this tax year then a further £4k at your convenience next tax year. Some people prefer to leave it towards the end of the tax year to get more interest elsewhere.

Alex

I have just read the information for a LISA and it states that the money must be in the account for a minimum of 12 months to qualify for the 25% extra. So if I put £4000 in tomorrow, I wouldn't receive the 25% extra until the following year? Also I am not sure if I am being a doughnut or not but can you add up to £4000 every year and claim the 25% on that yearly amount? Does the money then stack up in that account?

Alexland

The bonus gets added into the account a month or two after the contribution. It doesn't matter which tax year the bonus is added in.

The LISA needs to be open 12 months for your solicitor to withdraw without penalty for a qualifying property purchase. The main limitations are you need to be a first time buyer buying a UK property worth up to £450k.

Every tax year you can add up to £4k for a 25% bonus up to £1k until age 50. So after 3 tax years you would have added £12k and received £3k of bonuses so the account balance would be £15k plus some interest.

Alex

binaryuniverse

gemmacampbell2019 wrote: »

Sounds silly but how on earth do you manage to keep track of all your saving accounts, especially with them being with different banks? :rotfl: I am wanting to make the most of my money but with no experience of working out the best options for the amount of money I have, I am clueless and would hate to make a mistake that would cost me dearly in the near future.

For me, I have a spreadsheet that has all my bank/savings/credit accounts detailed with balances and totals it all up to determine net gain, per month. Which I update once a month, after the bulk of the bills have come out. I can also plan all my standing orders, which I automate to make life easier.

It does require knowing what is expected to come out of those accounts every month. One wrong prediction and I can easily find myself with charges. But that hasn't happened yet (touch wood).
And yes, I do have to do a merry-go-round of online banking applications, to make sure everything is in order.

It requires discipline but I've made over £500 in interest and reward payments (not counting switch bonuses), over the last 2 years. I'd say that was worth the effort.

principlecounts

Alice_Holt wrote: »

Marcus - 1.5% instant access.

Is the Interest taxed?

eskbanker

principlecounts wrote: »

Alice_Holt wrote: »

Marcus - 1.5% instant access.

Is the Interest taxed?

Depends exactly what you mean by 'is it taxed' - it's not an ISA so interest earned is taxable, but would be taxed at 0% if total interest earned by the account holder didn't exceed their personal savings allowance (£1K for basic rate taxpayers, £500 for higher rate). There's no tax deducted at source on any savings accounts now though if that's what you meant, so it's paid at 1.5% and any subsequent taxation is (by default) dealt with in arrears after the end of the tax year, if applicable.

Zero_Sum

gemmacampbell2019 wrote: »

Sounds silly but how on earth do you manage to keep track of all your saving accounts, especially with them being with different banks? :rotfl: I am wanting to make the most of my money but with no experience of working out the best options for the amount of money I have, I am clueless and would hate to make a mistake that would cost me dearly in the near future.

I use MS money to keep track of everything

principlecounts

eskbanker wrote: »

Depends exactly what you mean by 'is it taxed' - it's not an ISA so interest earned is taxable, but would be taxed at 0% if total interest earned by the account holder didn't exceed their personal savings allowance (£1K for basic rate taxpayers, £500 for higher rate). There's no tax deducted at source on any savings accounts now though if that's what you meant, so it's paid at 1.5% and any subsequent taxation is (by default) dealt with in arrears after the end of the tax year, if applicable.

Thanks that's a good summary.