Need some advise on a savings or bond 1yr

spainboy1281

I recently wrote another thread regarding money inherited to me, it was £38k.
I have put £20k into an isa at nearly 6% which leaves £18k. I'm 50yrs old I work part time so I'm on a relatively low wage of around £15k a year in an employed job. I was looking at a fixed one year bond at around 5.8% (although I could get over 6%) but I'm worried about what to do and any hassle etc when I need to declare what interest is paid to me declaring HMRC for the tax on that.

The gross interest is around £1040 although I'd like that paid monthly to help me but being a single person with no advise I'm pretty much hopeless when it comes to anything HMRC and I don't want them messing up my tax codes!!! Is there a far easier option for me even if I have to take a lower percentage interest? I just want a hassle free saver.I can afford to put it away for a year but don't want the headache that comes with it. 

Sg28

If you earn 15k a year and have no other savings you will pay no interest on £1040.

Doctor_Who

Might be worth having a read of this MSE article. If you earn less than £17,570 you will have some of the starter savings rate (0%) available to use against savings interest (in addition to the £1000 personal savings allowance).

https://www.moneysavingexpert.com/savings/tax-free-savings/

Bigwheels1111

If you earn 15k you are left with £3570 in your tax code.
This is £2570 starter savings rate and £1000 PSA.
So you can get £3570 of interest tax free.
Plus you do not need to inform them of this.
Only if your interest exceeds 10k a year.
Then like me you would need to file a self assessment return.
Get the best rate you can and relax and wait for you interest to roll in.

Albermarle

Due to the above comments then probably you do not need to be saving in an ISA at all.

spainboy1281

Albermarle said:

Due to the above comments then probably you do not need to be saving in an ISA at all.

Hi. AHH because I'd come under the threshold of not paying tax?

jpsman

I'll let others comment on the tax implications as that can get complex (you're best off reading and digesting the MSE article mentioned above). But just to say that if you invest in a non-ISA fixed rate for eg 1 year, your invested money will be completely inaccessible for that year. One big advantage of a fixed ISA is that if you do need to access your money, you can (albeit usually for a penalty). So it's not just about tax considerations when it comes to a fixed ISA. Hope that helps.

Doctor_Who

spainboy1281 said:

Albermarle said:

Due to the above comments then probably you do not need to be saving in an ISA at all.

Hi. AHH because I'd come under the threshold of not paying tax?

Because you have spare starter savings rate band available that is taxed @ 0%. Hence, interest earned outside an ISA (as long as it falls within your 'spare' starter savings rate) will not incur any tax (like interest earned within an ISA). You can often get better rates outside an ISA, so will earn more interest.

Albermarle

jpsman said:

I'll let others comment on the tax implications as that can get complex (you're best off reading and digesting the MSE article mentioned above). But just to say that if you invest in a non-ISA fixed rate for eg 1 year, your invested money will be completely inaccessible for that year. One big advantage of a fixed ISA is that if you do need to access your money, you can (albeit usually for a penalty). So it's not just about tax considerations when it comes to a fixed ISA. Hope that helps.

That  is a fair comment, but a caveat to that is a few non ISA fixed rate accounts do actually allow early closure with a penalty. Mainly providers that are part of the LLoyds group.

jpsman

Albermarle said:

jpsman said:

I'll let others comment on the tax implications as that can get complex (you're best off reading and digesting the MSE article mentioned above). But just to say that if you invest in a non-ISA fixed rate for eg 1 year, your invested money will be completely inaccessible for that year. One big advantage of a fixed ISA is that if you do need to access your money, you can (albeit usually for a penalty). So it's not just about tax considerations when it comes to a fixed ISA. Hope that helps.

That  is a fair comment, but a caveat to that is a few non ISA fixed rate accounts do actually allow early closure with a penalty. Mainly providers that are part of the LLoyds group.

Interesting. I just had a quick look and it seems you have to visit a branch to close early.