Tax-Free Saving (not ISAs etc!) Advice

Gorgeous_George

I make it the same as saving £25 pcm at an average rate of 4.5%. That is 7.5% for a higher rate taxpayer or 5.625% for a basic rate taxpayer.

Most people would be better off saving in their building society Just like Premium Bonds it would seem that they are a tax break for the rich.

Of course, there is a little life insurance to be considered but not enough to justify the cost.

Mine matures in March 2010. I wonder how much I'd get if I cashed it in today?

Any ideas?

Basic Guaranteed Benefits: £2,597.00
Previous Bonuses: £220.76
2008 bonus: £24.45
Total Benefits: £2,842.21

Thanks in advance.

GG

cheerfulcat

Hi, GG,

Gorgeous_George wrote: »

Most people would be better off saving in their building society Just like Premium Bonds it would seem that they are a tax break for the rich.

I'm sorry, but I am struggling a bit with this conclusion. They are both rubbish products - the tax-free nature of the returns might make the perk, such as it is, more valuable to a higher-rate taxpayer in that there is a higher tax liability avoided but " tax break for the rich " is IMO vastly overstating the case.

jamesd

roadrunner131, that investment didn't do very well. Instead of trying to use that 25 that is specific to friendly societies, you should probably consider using the 3600 per person per year cash ISA allowance (no monthly restriction, just per tax year) and/or the stocks and shares ISA that can use up to 7200 minus the amount used for the cash ISA that year. Stocks and shares can mean unit trusts and OEICs. 25 a month is a bit low, you'd have more options with 50 a month.

You say that you're overpaying the mortgage. What is the mortgage interest rate? It may be more effective to use the ISA allowances instead of overpaying.