Interest on £200K?

jules9

Hi,

I am shortly to be divorced and need some financial advice. I am likely to have around £200K of avaialble cash and will probably look to rent short term while the housing market sorts itself out.

It will cost me around £750pm to rent with usual outgoings on top. What i need to know is what will £200k bring me each month at the best available market interest rates. I am a 40% high rate taxpayer. Knowing this will assist me in working out how much i can save. I earn on average £2000 take home pay per month.

Any help or advice appreciated.

CLAPTON

just by way of example
if you saved in an a/c offering 6% AER then

200,000 x 6% is 12,000 per annum gross
which is 1,000 per month gross
which is 1000 x 60% = 600 per month after tax at 40%

you may be able to get a little more than 6% but I'm assuming you want instant access and monthly interest so e.g B&B offer 6.10% with internet access and monthly interest

Mikeyorks

jules9 wrote: »

Hi,


A) I am a 40% high rate taxpayer.

I earn on average £2000 take home pay per month.

Superficially - those two statements don't align? Could well be reasons for it - but are you quite sure about A)?

Lokolo

2000 he/she takes home every month. maybe after tax/pension etc.?

CLAPTON

Mikeyork is quite right

assuming 6% pension and usual tax rules and no benefits in kind, a take home salary of 2000 per month is equivalent to a gross salary of 2,600 per month or 31,200 pa which is a long way away from 40% tax band. However, an extra 12,000 gross interest will mean some is taxed at 40%

Mikeyorks

Lokolo wrote: »

--- maybe after tax/pension etc.?

Possibly. But circa £24k net against a 40% threshold of £38,525 ..... leaves a fairly sizeable gap?

Could be pension contributions / coding restrictions against Interest etc etc ......but, as I said, superficially it looks odd.

barak

Could be receiving substantial investment income.

cledor

It depends on all the benefits shown on your P11D (car, medical cover, paid pension contribs, other allowances...)