Unsure on which, saving £1500. 9 June 2005 at 9:20PM edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings 8 replies 992 views

unreal_3

Hi,
I am 16 and over the last 16 years of my life I have accumilated roughtly £1500 which is now sat in a Britania savings account at my local Britania.

Basically from reading the site I am left unsure of the best way to save the money and also wasn't sure if anything else applies with me still being in full time education and planning to go on to A levels next year.

I dont mind if the money is in an online account, local bank/building society but I would like to know what is my best bet on where it should be.

I at maximum withdraw £100 each year in one go and probably put currently £100 once in summer and about £150 just after christmas.

Thanks
Ben

sneekymum

Are you receiving interest tax-free? You should be if you are not earning enough to use up your basic tax allowance. You can claim tax back if you've paid any by accident.

If I were you I would look in a national newspaper at the "Best Buy" tables. The Mail on Sunday always has one.

unreal_3

cheers I will have a look

My annual interest on £1500 is about £40 if I recall correctly. Would you say thats average or below average.

Last years interest was about £37 I think and that was deffinately tax free beacause I was 15.

sneekymum

£37 interest on £1500 sounds a bit poxy to me - you can easily get 5% in an instant access on-line account (£75) - some of these work by using a direct debit to a current account and would not be much use to you, but others will give you a paying-in book to post them cheques and a debit card to withdraw cash (check the machine doesn't charge first).

Perhaps your account is a 'childrens account' - these sometimes pay terrible interest - there's no reason you can't use the best account you can find and tell them you want interest tax-free - they'll send/give you a form to fill in. Tax-free interest is not to do with your age but your lack of income. There are 15 year olds who pay lots of tax...

I think there are some new high-street accounts giving good interest (see the newspaper - people are not allowed to recommend particular products on here) and that may be more appropriate if you're putting cash in.

Watch out if you put in cheques from your parents because if your interest goes over £100 a year it may be taxed as your parents income. e.g. don't let 'granny' give your 'dad' some cash and then he writes you a cheque for it...the cheque should come from 'granny'.

unreal_3

So the article on the frontpage on savings, should I just pick the top one of them? (avoiding names as you say)

sneekymum

Probably, depending on stuff like "if its a high-street account is there one near you.." or "I'm not giving them my money because I heard they...."

Watch out for the rates changing. Some accounts are on recruitment drive and have a good rate which slowly slips away over time. ING has been 5% for a long time now - but that's an account which links to a direct debit (and I'm not necessarily recommending it or not recommending it...). Some people like to surf the top rates with credit cards and the same can apply to savings too but this only works if you are prepared to keep on top of it.

wywywywy

Sorry I am relatively new to this site, having only been here for 1 month or 2.

Why are people not allowed to recommend particular products?

sneekymum

Here's a thread that started to turn nasty - you could read all of it but my link will take you to where the MSE man stepped in... GO

Note - we got a bit off subject on that thread - it was supposed to be about self-employed pensions.

ReportInvestor

I'm not surprised that you haven't done particularly well with Britannia. They are historically the worst of the top ten building societies for savings:

See this Investors' Association Building Society survey

Like sneekymum, I think ING's pretty good. It is possible to do better but keep your eyes open for sudden rate reductions and for "teaser rates" that offer an introductory bonus for a limited period.

Here's one such from the West Bromwich BS that starts at 5.4% on a 1K investment

Some banks & building societies do accounts specifically for young people that continue into student years e.g. Norwich & Peterborough's Headstart II paying 4.8% up to age 24, but I can't find any such accounts that give you flexibility AND beat ING's 5%.