Nervous about using flexible ISA to maximise savings interest

CeliaSeas

https://forums.moneysavingexpert.com/discussion/comment/81959030#Comment_81959030

Thank you very much for taking the time to explain and for providing a link, I will look into this.

CeliaSeas

https://forums.moneysavingexpert.com/discussion/comment/81959132#Comment_81959132

Nothing from HMRC, not a peep all the time I've been self employed. Re tax returns once I've ceased trading, well, I was under the impression that I'd have to still fill in a return to declare any interest. But I guess I'm just a bit paranoid/phobic about HMRC🤦🏻‍♀️

Thanks for all replies, I feel very reassured now😊

friolento

https://forums.moneysavingexpert.com/discussion/comment/81959217#Comment_81959217

if your only income is interest, you only need to submit a self assessment if you get more than £10k annual interest.
Even then, you can get up to £18,570 tax free.

You won’t have to pay NI when you stop working. If you haven’t already, do check your state pension forecast though - you might want to continue to make voluntary NI contributions so you will get a full state pension https://www.gov.uk/check-state-pension

friolento

Just in case you are unaware: from 6 April 2027, your cash ISA limit will be £12k per annum for under 65s. You might as well get your head round S&S ISAs sooner rather than later, and keep an ear on the ground about the forthcoming changes as they aren’t yet completely finalised. Don’t be scared about S&S ISAs, there are low risk options, and no-fee platforms.

There are also a number of ISA transfer offers which could pay you substantially more than a year’s Regular Saver interest. You have just missed a number of year-end deals, where some providers paid 1% or 2% cashback but these kind of deals may reappear. There’s a dedicated thread on here about these offers. You could put a toe in the S&S ISA water with one of these offers.

https://forums.moneysavingexpert.com/discussion/6635598/the-cashback-for-bank-or-investment-accounts-discussion-thread

At present, you can still invest in Money Market Funds (MMF) within an ISA, which are minimum risk and not completely unlike cash savings - i.e. they pay you interest but you do pay a fee to the Fund Manager. This can be as low as 0.1% per annum, and shouldn’t be much higher. For example, have a look at the https://www.rlam.com/uk/intermediaries/funds/fund-centre/Royal-London-Short-Term-Money-Market-Fund/?shareClass=YAccGBP#performance

One other possibility for making a few quick and easy bucks are current account switch offers. Again, they are usually discussed on this forum, and are also mentioned in the weekly MSE newsletter. People have made as much as £2k from these offers, for relatively little effort.

wmb194

https://forums.moneysavingexpert.com/discussion/comment/81959311#Comment_81959311

Or if HMRC has specifically asked you to submit a SA return. If the OP's already submitting them they'll probably need to continue for at least a couple of years before HMRC says they can stop.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81959217#Comment_81959217

The banks will report the interest you earn annually to HMRC around June ( of course any interest earned in an ISA is not reported).

CeliaSeas

https://forums.moneysavingexpert.com/discussion/comment/81959311#Comment_81959311

Thank you, I hope you're right about the self assessment but as wmb194 mentioned I have wondered if they might want me to carry on for a bit longer.

Thanks also for reminding me to check my pension forecast. I looked a while back & seem to remember that I'll be short by one year, unless I can manage to squeeze out 6k or over in profits in the year 26-27!

CeliaSeas

https://forums.moneysavingexpert.com/discussion/comment/81959334#Comment_81959334

Thank you for your encouragement😁 I'm hoping that if I can get a good system going with regular savers etc it will help me to 'get my eye in' and overcome my resitance to S&S

CeliaSeas

https://forums.moneysavingexpert.com/discussion/comment/81958982#Comment_81958982

"On the subject of using flexibly withdrawn ISA funds to feed regular savers, most accounts have a 12 month term, so how exactly are you planning to make that work?"

Well, you do sound a bit Headmaster-ish there Masonic😁 but of course I see your point! I may not be able to replace all of the flexibly withdrawn funds.

DeepSporran

T&Cs vary across regular savers on offer, but many do allow at least one withdrawal before maturity without penalty. So you just have to read the rules carefully and make sure you don’t get trapped into any accounts where you’re stuck for the full 12 months.