Saving up money

GeCon

Hi,

I really hope someone on here can help.

I would like to put some money into a different account each month in order to save up some money, which I will be needing at beginning of December.

I have had a look in Martin's savings section, but I am now even more confused than I was before.

The articles explain about your tax-free allowance and ISA's. But my question is: How does it work? Would that need to be declared somewhere? And if so, where?

Sorry if my questions sound a bit stupid, but I just don't get it...yet!

Any help would be much appreciated.

Lokolo

An ISA is a type of savings account. You have an allowance of £3600 each tax year to put into an ISA. Does not have to be declared. You can only open one ISA each year to put new money in.

i.e. you have £3000, you cannot put £1000 in Egg ISA and £2000 in HSBC ISA. You can only put £3000 in Egg or HSBC ISA.

GeCon

I read this in the article: "Each tax year (6 April until the next April 5) everyone aged 16 or over gets a new ISA allowance. If you don't use it, you lose it. Yet if you do put the cash in, you can keep it in there, tax-free for as long as you like. And as soon as the next tax year starts (i.e., 6 April) you can put a whole new £3,600 in too."

So does that mean you can actually have more than £3,600 (from previous years) or is it still limited to £3,600?

Techno

you can have £3600 every year (or until the Gov stop it) but if you withdraw you can't put it back in

LittleVoice

It is £3.6K each year. So in year 2 you could have £7.2K plus the interest from year 1.

moneysavingmonkey85

Yes it means you could put 3,600 in this year, and the same next year. You can do this in one go or bit by bit every month up to 3,600, but if you withdraw it you can't replace it.

Hope this helps!

GeCon

So if I didn't withdraw anything and it wouldn't get stopped or changed, I could have saved £36,000 plus interest TAXFREE after 10 years?

Lokolo

Yes, that simple

GeCon

Can I just ask another question that I am not so sure where else to post?

Does everyone complete a tax return?

Lokolo

I don't but only because I don't pay tax, I will after this tax year though as I have paid some. But obviously when I go into a career I will.

grebbo

GeCon wrote: »

Can I just ask another question that I am not so sure where else to post?

Does everyone complete a tax return?

Only if you're a higher rate tax payer or Company Director IIRC