Regular monthly savings.

Nick_Sellick

Hi All,
I am wondering if there is a generally accepted view on what to do with a regular amount of money, Less than £1k, that I would like to save each month. 
I'm 60 and have retired and gone back to work part time. Pay a tiny amount of tax on my earnings.
I couldn't decide on a Regular savings account, or an ISA. 
Probably happy for the money to be locked for a year, but access would be good if the penalty wasn't too great.
Any thoughts?
Cheers
Nick

eskbanker

It'll probably depend on your actual figures - if you're paying some tax on your earnings then that suggests more than £12,570, which may still leave a decent amount of headroom before you'd start paying tax on savings interest, but "less than £1K/month" could be £1 or £999, which would potentially give different answers.

In general, the best approach is to maximise your net return rather than trying to avoid tax as such, but you would need to model your total income to be sure of reaching the best answer, and if you're unsure about being locked in then you might want to mix and match, i.e. keep some, but not all, accessible?

Emmia

I'd mix and match (depending on your current position savings wise) some into instant access savings at a good interest rate like Chip, and some into an ISA. 

I'd also possibly pop some £100 on the premium bonds ( for a bit of a flutter).

MX5huggy

Pension. 

Pay as much as you can afford into a pension you’ll get 25% tax relief added even if you don’t pay tax on it. You’ll get 25% out tax free and may pay 20% tax the rest, which is a benefit of 6.25% over an ISA. 

amanda1024

Mix and match might work:
- top up pension (unless already being retired complicates this
- regular savings accounts (https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/) are well suited to adding a bit each month; often there's a max you can save each month but you can open more than one. Most will put the money into a low interest account after a year - I usually use these lump sums to fund a fixed term isa
- if you want a bit to be accessible, put it in an easy access savings account - there are some decent rates available right now 

saverkev

Pension

Always remembering you can make up contributions to max out previous 3 tax years

Dazed_and_C0nfused

saverkev said:

Pension

Always remembering you can make up contributions to max out previous 3 tax years

The chances of that being relevant for the op are slim to nothing though.

I'm 60 and have retired and gone back to work part time. Pay a tiny amount of tax on my earnings.

Nebulous2

I'd second, or third the idea of a pension. I retired two years ago at 59 and have a pension we could almost live on, without any frills. I also took a part-time job, one day a week, with an occasional extra day. As I have a pension above the tax allowance, I'm paying tax on all my part/time earnings. 

I'm working for the NHS and joined the pension scheme. In addition I'm paying £400 net, £500 gross into a SIPP. The rest goes into regular savers, which is a good way to build up some money from a modest monthly sum. I've become over-enthusiastic about them, opening a new one every 2 to 3 months, which has left me struggling to fund them, but from mid - October I'll have one maturing regularly going forward.