Need savings advice - lump sum £3-4k

ar3577

Hi,

I have been told that my folks will be giving me and my partner about £3-4k as a wedding present  ;D and we have decided that we would like to put this money to one side to use as an 'emergency fund'.

Ideally I would like to open a savings account, but we are not in a position to add to this money on a regular basis (if at all) and as it is for emergencies, we would need to be able to get access to it on an ad-hoc basis.

Can anyone give me some advice about our options here.

We both work full time and pay tax @ 22% although I am on the threshold of 40% (but not there yet).

Will we have to pay tax on this at all ?

Thanks
A

ar3577

Thanks for that.

Is there anyway that I can keep all of this in one account and not have to pay tax on the money ?

Ta

A

ar3577

Rafter - Thanks for the good advice.

Sorry to ask a silly question, but what if I were to just put this in a savings account (e.g. Egg etc) would the tax be automatically taken from the interest.

Also, should I go above 40% tax, will the bill go up by much ?

Sorry if these are basic, but never actually had any spare money to put away before !!

The weddings not until next May, but still can't wait and thank you for your thoughts.

A

Unbelievable_2

Yes - if you put the money in a savings account the interest will be paid net of tax at 20% automatically (eg if you earn £100 gross interest you will receive £80). Once you become a higher rate tax payer you will have to declare the interest earned on your tax return and a further 20% tax will be payable.

Click here for some extra tips ;D

ar3577

Superb - that's all I needed to know.

Think I will dump it all into an account in my name now and then if it looks like I will get a pay rise, I will move it into my partners name.

Thanks for all the help.

A