ISA, Premium Bonds

Carol1963

Afternoon All,    I'm on a DMP with Stepchange but want to know if I can open an ISA account and put some money into premium bonds - can I?

sammyjammy

You can, a DMP is an informal form of debt management.  What do Stepchange think you are spending that money on?  Unless you are expecting to save £1000s an ISA is of no benefit to you.

Carol1963

Thank you.  Will the ISA provider ask if I've got debts?

Albermarle

You can not buy Premium Bonds in an ISA, there would be no point anyway as Premium bond prizes are tax free anyway. You just buy them direct from NS&I

Carol1963

Thank you.  I'm aware of that, I will be purchasing Premium Bonds and will be opening an ISA.  My query is can I if I'm on a DMP.  Will the ISA provider I choose ask if I've got debts please?

Emmia

There is an argument that if you have enough spare cash where an ISA or premium bonds are being considered, that perhaps you should be using that money to settle/pay off your debts...

Carol1963

I will be but thank you.  Do you know the answer to my question though please?

Martico

There's also an argument that it's wise to build up an emergency fund.
In answer: an ISA provider wouldn't ask such a question

Carol1963

That's what I'm trying to do, it wont be a lot but at least I'm trying.

Thank you.

Emmia

If you're just trying to build an emergency fund, I'd have thought a straight savings account would be more appropriate - ISAs and PBs are things more suited to longer term investment.

ColdIron

If you don't currently, or expect to, pay tax on your savings interest (I.e you are a basic rate taxpayer and earn less than £1,000 in interest per year) an ISA isn't likely to be of any benefit to you over a taxable account

Similar story with PBs with the added issue that they are not usually economic with smaller amounts

Just find the highest rate that suits you, tax free or not