Where else can I save??

fidaa
fidaa Forumite Posts: 56
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edited 7 July at 9:36PM in Savings & investments
After some advice please.

Put in max amount for this ISA tax year, have fully used up premium bonds allowance too.

I am a 40% tax payer so if I do put it into normal savings account any interest I earn will tip me over 100k income anyway so chip into my personal allowance.

Where else can I invest?
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  • ColdIron
    ColdIron Forumite Posts: 8,049
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    edited 7 July at 9:40PM
    How is your pension provision? The tax relief is generous, especially for higher rate taxpayers
  • fidaa
    fidaa Forumite Posts: 56
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    ColdIron said:
    How is your pension provision? The tax relief is generous, especially for higher rate taxpayers
    I pay into a SIPP but towards end of.tax year only.

    Have an employer pension on top
  • fidaa
    fidaa Forumite Posts: 56
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    boingy said:
    2 options:

    1. Put it in your pension
    2. Put it in the highest paying savings account you can find, pay the tax and be happy that you have that much money.
    With savings account first £1000 is tax free right?

    But I am guessing if you did earn a £1000 it adds onto overall income?
  • ColdIron
    ColdIron Forumite Posts: 8,049
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    edited 7 July at 9:58PM
    fidaa said:
    boingy said:
    2 options:

    1. Put it in your pension
    2. Put it in the highest paying savings account you can find, pay the tax and be happy that you have that much money.
    With savings account first £1000 is tax free right?
    £500 for higher rate tax payers (it's not tax free, rather it's taxed at 0%)
    But I am guessing if you did earn a £1000 it adds onto overall income?

    Yes unlike pensions. Does your employer offer salary sacrifice? That could reduce it

  • Tom_Hendo
    Tom_Hendo Forumite Posts: 77
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    fidaa said:
    boingy said:
    2 options:

    1. Put it in your pension
    2. Put it in the highest paying savings account you can find, pay the tax and be happy that you have that much money.
    With savings account first £1000 is tax free right?

    But I am guessing if you did earn a £1000 it adds onto overall income?
    You are nearly right. It does add to overall income, and if overall income is above the higher tax bracket income (just over £50k) then you only get £500 tax free rather than £1000 tax free (before paying the relevent tax, in this scenario 40%) 

    Also if you earn less than 17.5K there are other personal limits that kick in before the £1000, just in case thats relevant. 
  • fidaa
    fidaa Forumite Posts: 56
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    ColdIron said:
    fidaa said:
    boingy said:
    2 options:

    1. Put it in your pension
    2. Put it in the highest paying savings account you can find, pay the tax and be happy that you have that much money.
    With savings account first £1000 is tax free right?
    £500 for higher rate tax payers (it's not tax free, rather it's taxed at 0%)
    But I am guessing if you did earn a £1000 it adds onto overall income?

    Yes unlike pensions. Does your employer offer salary sacrifice? That could reduce it

    So if I earn 98k and get £500 interest from bank saving it becomes 98.5k? And I get taxed 40% on the £500?
  • fidaa
    fidaa Forumite Posts: 56
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    Tom_Hendo said:
    fidaa said:
    boingy said:
    2 options:

    1. Put it in your pension
    2. Put it in the highest paying savings account you can find, pay the tax and be happy that you have that much money.
    With savings account first £1000 is tax free right?

    But I am guessing if you did earn a £1000 it adds onto overall income?
    You are nearly right. It does add to overall income, and if overall income is above the higher tax bracket income (just over £50k) then you only get £500 tax free rather than £1000 tax free (before paying the relevent tax, in this scenario 40%) 

    Also if you earn less than 17.5K there are other personal limits that kick in before the £1000, just in case thats relevant. 
    What you mean about 17.5k

    Is it not 12.5k?
  • Sarahspangles
    Sarahspangles Forumite Posts: 1,128
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    A couple can have two lots of premium bonds plus two sets of ISA, personal tax and personal savings allowances. But if you’re single, coupling up just for tax purposes is a bit extreme.
  • ColdIron
    ColdIron Forumite Posts: 8,049
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    fidaa said:
    ColdIron said:
    fidaa said:
    boingy said:
    2 options:

    1. Put it in your pension
    2. Put it in the highest paying savings account you can find, pay the tax and be happy that you have that much money.
    With savings account first £1000 is tax free right?
    £500 for higher rate tax payers (it's not tax free, rather it's taxed at 0%)
    But I am guessing if you did earn a £1000 it adds onto overall income?

    Yes unlike pensions. Does your employer offer salary sacrifice? That could reduce it

    So if I earn 98k and get £500 interest from bank saving it becomes 98.5k?
    Yes
    And I get taxed 40% on the £500?

    You get taxed 0% on the first £500 (your Personal Savings Allowance) and 40% on any excess

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