ISA or savings account or both

uncle-albert

Hi, my wife and I have £100,000 that we're trying to move about and avoid paying as much tax as possible on the interest. My wife and I are both basic tax payers. We have no ISA's and it's in an account paying 1.98%. I don't want to lock the money away and want easy access. Am I right in saying that we'd be better off putting the maximum into an ISA each and the rest into a higher interest account? Thanks for any advice.

xylophone

You could each put £20,000 into an ISA now and the same  on or after 6 April. You would then receive tax free interest on £80,000. 

Interest on the remaining £20,000 should fall within your PSAs.

Savings tables here

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

ColdIron

His & hers ISA before 06/04/23 and again after would tuck £80,000 away

Virgin have one at 3.00% (conditions apply)

https://moneyfacts.co.uk/isa/instant-access-cash-isas/?quick-links-first=false

Dazed_and_C0nfused

uncle-albert said:

Hi, my wife and I have £100,000 that we're trying to move about and avoid paying as much tax as possible on the interest. My wife and I are both basic tax payers. We have no ISA's and it's in an account paying 1.98%. I don't want to lock the money away and want easy access. Am I right in saying that we'd be better off putting the maximum into an ISA each and the rest into a higher interest account? Thanks for any advice.

Are either of you paying basic rate tax on less than £5,000 of your earnings or pension income?

If so you should have some savings starter rate band (0% tax rate) available to use as well as the £1,000 savings nil rate band.

So ISA's might be a good option but not necessarily so.

AmityNeon

Do you need really easy access to the entire amount within 12 months?

If you require penalty-free withdrawals and absolutely cannot utilise fixed terms, you'll limit the rate of ISAs available, which in turn will mean Regular Savings offer better net returns (when used in addition to non-Regular accounts), if you don't mind the administrative management.