Best Way to Save £50k for 18 Months

CJMylchreest

Hi Everyone,

I am looking for the best way for my wife and I to save £50,000 for 18 months.

I think the best and most tax efficient way would be to open 2no. Cash ISAs (around (5%) for £40k and add £10k to a high interest savings account.

If there's a better way, I'd love to hear it!

Many thanks in advance.

Charlie.

MEM62

Nope!  You have the right plan.  

eskbanker

CJMylchreest said:

I think the best and most tax efficient way would be to open 2no. Cash ISAs (around (5%) for £40k and add £10k to a high interest savings account.

'Best' (in terms of maximum return) may not be the same thing as 'most tax-efficient' (least tax paid), so it'll generally be recommended to focus on net return - many can earn fairly substantial amounts of savings interest without actually paying tax, given the various allowances available, which are dependent on tax status and so on.

Having said that, the best cash ISA currently pays more than non-ISA accounts (unless you have the time and inclination to use multiple regular savers), so right now the ISA route probably is best for the £40K, but worth keeping an eye on as plenty can change over 18 months.

Exodi

eskbanker said:

CJMylchreest said:

I think the best and most tax efficient way would be to open 2no. Cash ISAs (around (5%) for £40k and add £10k to a high interest savings account.

'Best' (in terms of maximum return) may not be the same thing as 'most tax-efficient' (least tax paid), so it'll generally be recommended to focus on net return - many can earn fairly substantial amounts of savings interest without actually paying tax, given the various allowances available, which are dependent on tax status and so on.

Having said that, the best cash ISA currently pays more than non-ISA accounts (unless you have the time and inclination to use multiple regular savers), so right now the ISA route probably is best for the £40K, but worth keeping an eye on as plenty can change over 18 months.

I was about to say the same - remembering there are a lot of regular savers that pay more than any Cash ISA (if we're truly seeking to maximise returns).

Depending on tax position it might be maxing out high interest Regular Savers, then putting the rest in Cash ISA's.

(Removed by Forum Team)

Your username, posting style, language, etc reek of AI.

CJMylchreest

Thanks all - to confirm, I am a top rate tax payer, but my wife doesn't work so is presumably lower rate.

On this basis, I suspect I should set up an ISA in each of our names, and a savings account in my wife's name.

Thanks.

Bigwheels1111

CJMylchreest said:

Thanks all - to confirm, I am a top rate tax payer, but my wife doesn't work so is presumably lower rate.

On this basis, I suspect I should set up an ISA in each of our names, and a savings account in my wife's name.

Thanks.

If your wife does not earn, ie, no income at all, no benefits etc.
You are laughing, She can get up to £18,570 tax free income from interest.
If she has not given you marriage allowance.

elkiedee

I think Cash ISAs are probably a good idea for both of you, but for the £10K left after opening one of those each, if you split savings between you, then your best options may be a little bit different. 

Do you have any savings (or a mortgage) with the Nationwide? Although their headline rates aren't usually top (but they have had good offers at some points during the last few years), they are making Fairer Share payouts of £100 to many customers. It's too late to qualify this year if you don't already, but you could look at trying to get £100 each next summer in addition to advertised interest rates. The payouts are potentially taxable and do contribute towards your allowances, so again, the calculations for you and your wife at higher rate and not currently a taxpayer will be different.

Also last year they also offered an excellent rate on an 18 month savings bond to qualifying existing customers - which didn't suit me but I know lots of people on this forum did take it up.