I've never had any savings before and need help

DRS1

OP If you are worried about tax on the interest you have already earned then you just need to check your existing savings account to see what interest has been paid and when. Hopefully you went for annual interest and it will be very simple to see if you are over the £1k personal savings allowance for 24/5 (unlikely) or 25/6.

Oh and just be warned the amount you can put in a cash ISA is going to go down from 20k to 12k from April 2027 so it would make sense to get the money in there while you can.

surreysaver

If you're going to put the money in an ISA, put £20k in by 2nd April at the latest. You can put the rest in the following week on or after 6th April.

I use Ford Money as my ISA. It's flexible (as in you can replace money you take out without it affecting your ISA allowance), it's generally one of the higher rates, and they don't muck about with the rate as often as other providers do.

CliveOfIndia

https://forums.moneysavingexpert.com/discussion/comment/81907790#Comment_81907790

Semantics - "from" could mean "after". But I take your point. Like I said, take a look at the official HMRC website for guidance. I'm not wanting to engage in petty arguments, was hoping to give the OP some helpful guidance.

mebu60

https://forums.moneysavingexpert.com/discussion/comment/81907870#Comment_81907870

'Oh and just be warned the amount you can put in a cash ISA is going to go down from 20k to 12k from April 2027 so it would make sense to get the money in there while you can'

Unless you will be aged 65 or over at that time when it remains at £20k. Don't think we've had the detail yet about what happens if you reach 65 during the tax year!

But that's a good point to bear in mind if you are <65. If you use an EA for 26/27 because the rate is better than a Cash ISA you could move up to £20k into a Cash ISA during March 2027.

Middle_of_the_Road

https://www.barclays.co.uk/savings/isas/1-year-flexible-cash-isa/

Barclays are unusual as they allow penalty free withdrawals from their fixed term ISAs. 1 year 3.8%

Nationwide also have a 1 year @ 3.8% but no withdrawals allowed.

https://www.nationwide.co.uk/savings/cash-isas/

Yorkie1

OP, re. the savings interest on the account you have got at the moment - others have done some calculations and think that some of the interest will be above the £1K you can earn which is taxed at 0%. Assuming that to be the case, you will at some point get an adjusted tax code notice which reflects HMRC getting the tax back in the future. So you won't have to worry about it - it will all work itself out in the end.

allegro120

https://forums.moneysavingexpert.com/discussion/comment/81907803#Comment_81907803

From what you said I understand you want the simplest solution with minimum maintenance. I don't think in your circumstances ISA is much more advantageous than a normal Easy Access account. Some monitoring will be needed because the rates are variable, but it is much easier to do these transactions with none-ISA accounts. I'd suggest choose an Easy Access account or Flexible ISA that pays above 4%. Avoid those with limited access or short term bonuses or any other complications.

CurlySue2017

Thank you all so much for your insights and advice, it is really appreciated and I will be looking at all the suggestions 🙂

https://forums.moneysavingexpert.com/discussion/comment/81908064#Comment_81908064

This is what I was worried about, so that is reassuring thank you!

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81908619#Comment_81908619

It often works on a three year cycle.

Year 1: You earn the interest

Year 2: Your bank/building society reports the interest from year 1 to HMRC and HMRC do their annual check to see if you've underpaid (or overpaid) any tax in year 1. And send you a calculation if there is an underpayment or overpayment

https://www.gov.uk/tax-overpayments-and-underpayments

Year 3: Tax underpaid is paid back by an adjusted tax code for year 3

If you were overpaid the refund comes back to you, it doesn't get paid back via a tax code for a later tax year.

And HMRC normally use the interest amount from the previous complete tax year year as the estimate of interest you will get for the current tax year.

But if that estimate is too high (which could be the case for you in due course) the annual review process eventually resolves that without you needing to do anything apart from deciding what to do with your tax refund 😀

nottsphil

https://forums.moneysavingexpert.com/discussion/comment/81907638#Comment_81907638

Well the OP could, but nobody seems to have mentioned the superiority of some regular savers, most of which come with penalty-free instant access. A good example is Club Lloyds, paying 6.25% per annum. It's fixed, so you're guaranteed that rate for a whole year from opening. I suggest you do that right now*, with up to the maximum £400 if you have it. Then put another £400 in on the first of each subsequent month. 80% of 6.25% equates to a full 5% tax paid; where are you going to find an ISA paying that? There are others paying even more on the third post of this guide

*You need to open a Club Lloyds current account first, but you don't need your salary paid in, just £2K of total deposits paid in each month (they can be withdrawn the same day).