Is MSE always the best comparison sites? I have £85 to put in a three fix but ...

GrubbyGirl_2

If you're a tax payer you're going to pay a significant chunk of tax on £9k interest.  I'd be tempted to put the first £20k into an ISA like Saffron paying 5.4% (2 year) or virgin paying 5.85% (1 Year)

pw23

GrubbyGirl_2 said:

If you're a tax payer you're going to pay a significant chunk of tax on £9k interest.  I'd be tempted to put the first £20k into an ISA like Saffron paying 5.4% (2 year) or virgin paying 5.85% (1 Year)

I was told, because I am a retired housewife with no income that I wouldn’t be liable to pay tax on the interest I earn (£9K after two years) on the £75k

savings

Is that not the case?

eskbanker

pw23 said:

GrubbyGirl_2 said:

If you're a tax payer you're going to pay a significant chunk of tax on £9k interest.  I'd be tempted to put the first £20k into an ISA like Saffron paying 5.4% (2 year) or virgin paying 5.85% (1 Year)

I was told, because I am a retired housewife with no income that I wouldn’t be liable to pay tax on the interest I earn (£9K after two years) on the £75k

savings

Is that not the case?

While interest from (non-ISA) savings is taxable income, you won't actually pay tax if you have sufficient headroom within your three allowances/nil-rate bands, so if you have no other income at all then you could avoid tax on up to £18,570 of savings interest:

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

GrubbyGirl_2

pw23 said:

GrubbyGirl_2 said:

If you're a tax payer you're going to pay a significant chunk of tax on £9k interest.  I'd be tempted to put the first £20k into an ISA like Saffron paying 5.4% (2 year) or virgin paying 5.85% (1 Year)

I was told, because I am a retired housewife with no income that I wouldn’t be liable to pay tax on the interest I earn (£9K after two years) on the £75k

savings

Is that not the case?

No you'll be fine if you have no other income - I did sat IF you're a tax payer