Confused about best savings account for current circumstances

DRS1

elsien said:

Inforapennyinforapound said:

elsien said:

Job seekers isn’t means tested, so the money will have no impact on that anyway. 

Really? I never knew that. Someone at DWP told me that when she goes for interview they will ask lots of questions including savings etc to assess what she should get! 

What you say surprises me

They misinformed you. That applies to UC not jobseekers.
https://www.gov.uk/guidance/new-style-jobseekers-allowance

Of course when she goes for the interview they may ask questions to see if she qualifies for some other benefit as well.  As far as I know it won't make any difference if the savings are in an ISA or not.  It does make a difference if the money is in a pension - why is she getting £10k from the pension provider?  Can she keep the money in a pension?  Of course if means tested benefits are not relevant then the pension may not be relevant but it may be sensible to keep what she can in a pension in any event. 

Kim_13

Inforapennyinforapound said:

elsien said:

Job seekers isn’t means tested, so the money will have no impact on that anyway. 

Really? I never knew that. Someone at DWP told me that when she goes for interview they will ask lots of questions including savings etc to assess what she should get! 

What you say surprises me

Historically that would have been correct, as there were two ways of qualifying for Job Seekers Allowance, needs based (which was means tested as it would be paid to those with limited assets regardless) or contribution based which was based on NI record (in the previous 2 tax years I think) and was not means tested on the basis that those who had paid into the system but had become unemployed should be given a period of time in which to find a new job before being expected to deplete their savings to cover all of their living costs. Your wife should qualify for the latter, but the former has been rolled into UC, making it easier to understand if a benefit is means tested or not. 

As for what I would do, using Regular Savers up to one’s PSA limit and then paying into an ISA beyond that usually gives the best return on cash savings. But Regular Savers do require more management than normal savings, so it depends on what the individual feels is best for them. Some work and manage a collection of Regular Savers as well, many have one or two paid by Standing Order (and something like the NatWest Digital Regular Saver is lower effort still as it never matures, so only requires intervention when the balance reaches £5k.) Others decide that their time is better spent on hobbies or with loved ones.

At the present time, with rates falling I am a fan of Family Building Society’s Market Tracker Saver as the product terms mean they can only move the rate 4 times a year on 1 January, 1 April, 1 July and 1 October while the tracking ensures it will always be a fair rate. If money is put into the best Easy Access account today, it could be far from the best rate in a month’s time. This is an ordinary savings account, not an ISA. 

ISA wise, choose a flexible ISA as this means that money can be withdrawn and replaced later (within the same tax year as it was withdrawn) without counting toward the £20,000 limit when it is put back in. Will your wife be intending to save from income once back in work, or has she earned any taxable interest to date in this tax year? If so, then using an ISA now is more likely to be the best home for the £20,000. I am usually a fan of Skipton’s Base Rate Trackers as again then they are limited as to how often they can move the rate within the product term and with BoE base rate movements making the news, it’s unlikely that you would miss any upcoming changes. Unfortunately there aren’t any available currently, but they can be opened with £1 when they are and easily switched to any new issue with a more favourable tracking margin thereafter.

Moneyfacts is generally the best place to look for a new product - select a class of product (Regular Saver, Easy Access, Easy Access ISA etc) and order by rate. It’ll probably be necessary to go through to the provider’s site to check that an ISA is flexible though.

https://moneyfactscompare.co.uk/savings-accounts/

Is your wife likely to be a higher rate taxpayer for 25/26 (considering her salary earned to date, any interest or dividends already earned that were not from an ISA, the upcoming £20,000 and JSA?) Would she expect to be going forward when she goes back to work?

Inforapennyinforapound

DRS1 said:

elsien said:

Inforapennyinforapound said:

elsien said:

Job seekers isn’t means tested, so the money will have no impact on that anyway. 

Really? I never knew that. Someone at DWP told me that when she goes for interview they will ask lots of questions including savings etc to assess what she should get! 

What you say surprises me

They misinformed you. That applies to UC not jobseekers.
https://www.gov.uk/guidance/new-style-jobseekers-allowance

Of course when she goes for the interview they may ask questions to see if she qualifies for some other benefit as well.  As far as I know it won't make any difference if the savings are in an ISA or not.  It does make a difference if the money is in a pension - why is she getting £10k from the pension provider?  Can she keep the money in a pension?  Of course if means tested benefits are not relevant then the pension may not be relevant but it may be sensible to keep what she can in a pension in any event. 

Thanks. She is taking a cash lump sum from her pension (a little more than £10,000). We looked at it and for this ‘piddly’ amount in a pension we thought best to take the lump sum,take charge of the money,and just put it into a savings account. She does not understand savings etc…I don’t know much but of say there was £300,000 in the pension then obviously we would take a different path!

From the link you kindly sent,it says that one of the documents needed is a pension statement. Seems this is taken into account.? Doesn’t seem very fair. She works in a low paid job when working and has been full time for past 10 years. Never been in this situation before. Made redundant end of November 2024.

so,let’s say she has £20,000(which it will be eventually once the pension is received)….then I still don’t know where would be best to put it. I have read the Savings MSE advice…and got confused by numbers. 

She will re-enter the workplace (hopefully) in low paid retail environment.

it appears ,to me,that an Easy Access Savings account is ‘probably’ the place to stick it 🤓

Inforapennyinforapound

Regarding above post,thought I was replying to @elsien…..anyway thanks DRS1 !

Inforapennyinforapound

Kim_13 said:

Inforapennyinforapound said:

elsien said:

Job seekers isn’t means tested, so the money will have no impact on that anyway. 

Really? I never knew that. Someone at DWP told me that when she goes for interview they will ask lots of questions including savings etc to assess what she should get! 

What you say surprises me

Historically that would have been correct, as there were two ways of qualifying for Job Seekers Allowance, needs based (which was means tested as it would be paid to those with limited assets regardless) or contribution based which was based on NI record (in the previous 2 tax years I think) and was not means tested on the basis that those who had paid into the system but had become unemployed should be given a period of time in which to find a new job before being expected to deplete their savings to cover all of their living costs. Your wife should qualify for the latter, but the former has been rolled into UC, making it easier to understand if a benefit is means tested or not. 

As for what I would do, using Regular Savers up to one’s PSA limit and then paying into an ISA beyond that usually gives the best return on cash savings. But Regular Savers do require more management than normal savings, so it depends on what the individual feels is best for them. Some work and manage a collection of Regular Savers as well, many have one or two paid by Standing Order (and something like the NatWest Digital Regular Saver is lower effort still as it never matures, so only requires intervention when the balance reaches £5k.) Others decide that their time is better spent on hobbies or with loved ones.

At the present time, with rates falling I am a fan of Family Building Society’s Market Tracker Saver as the product terms mean they can only move the rate 4 times a year on 1 January, 1 April, 1 July and 1 October while the tracking ensures it will always be a fair rate. If money is put into the best Easy Access account today, it could be far from the best rate in a month’s time. This is an ordinary savings account, not an ISA. 

ISA wise, choose a flexible ISA as this means that money can be withdrawn and replaced later (within the same tax year as it was withdrawn) without counting toward the £20,000 limit when it is put back in. Will your wife be intending to save from income once back in work, or has she earned any taxable interest to date in this tax year? If so, then using an ISA now is more likely to be the best home for the £20,000. I am usually a fan of Skipton’s Base Rate Trackers as again then they are limited as to how often they can move the rate within the product term and with BoE base rate movements making the news, it’s unlikely that you would miss any upcoming changes. Unfortunately there aren’t any available currently, but they can be opened with £1 when they are and easily switched to any new issue with a more favourable tracking margin thereafter.

Moneyfacts is generally the best place to look for a new product - select a class of product (Regular Saver, Easy Access, Easy Access ISA etc) and order by rate. It’ll probably be necessary to go through to the provider’s site to check that an ISA is flexible though.

https://moneyfactscompare.co.uk/savings-accounts/

Is your wife likely to be a higher rate taxpayer for 25/26 (considering her salary earned to date, any interest or dividends already earned that were not from an ISA, the upcoming £20,000 and JSA?) Would she expect to be going forward when she goes back to work?

Thanks for a comprehensive reply! See my post above. It’s far more simple in actual fact. Wife unemployed. £20,000 cash and where to stick it 😄…she will look for employment albeit low paid retail environment,as before. (I am main ‘breadwinner’)