Educate me on an ISA

[Deleted member 294929]

I may have hot on this before.

I'm looking at opening an ISA for my tax I put away that's doing nothing

So let's say I have 10 grand in tax waiting for the Tax man asking for a chunk.

What are my options on what's best for my money?

I'm with Lloyd's so for the time being ill stick with them for simplicity.

 

[JohnD]

Edit

I think you mean you want to save money for a year or less until you have to pay a certain bill?

Are you a basic rate taxpayer?

 

[Deleted member 294929]

Edit

I think you mean you want to save money for a year or less until you have to pay a certain bill?

Yes as the tax man wants his bit and I do use what's left over to pay vehicle insurances and taxes

 

[JohnD]

Then I think it is especially important to you that the value will not sharply drop in the short term.

(This also means that you will avoid holdings that may sharply rise, so your needs are not the same as a long-term investor or a speculator, who can tolerate a risk of loss if he believes that, overall, his gains will be bigger than his losses)

Are you a basic rate taxpayer?

 

[JohnD]

The relevance of your tax rate is that people who pay high tax rates gain the most from tax-avoidance.

Banks tend to shave down the interest they pay on tax-free accounts because they think that the saver will attach extra value to the tax saving. A person who is below his tax allowance may be able to get a higher rate of interest in an account that is not tax-free.

 

[Notch7]

2 vowels 1 consonant

 

[Notch7]

I may have hot on this before.

I'm looking at opening an ISA for my tax I put away that's doing nothing

So let's say I have 10 grand in tax waiting for the Tax man asking for a chunk.

What are my options on what's best for my money?

I'm with Lloyd's so for the time being ill stick with them for simplicity.

View attachment 329692

Well done for you for putting away tax money

lots of tradesmen dont

 

[Murdochcat]

I use my premium bond account to save for my SE tax and NI - always have done

I guess it depends on how much interest you get from other savings in your or joint names.

£10,000 @ 4.25% (for a basic rate tax payer) will yield £425 interest, so well below the £1,000 tax free

 

[Deleted member 294929]

Well done for you for putting away tax money

lots of tradesmen dont

I'm pretty good. I tax myself 35% this gives me a nice chunk at the end of Tax year

 

[Murdochcat]

I'm pretty good. I tax myself 35% this gives me a nice chunk at the end of Tax year

On a monthly basis I take my net profit, deduct £1,000, then save 1/3 of the remaining for Tax and NI - and yes I've never been short when it comes to paying my tax bills

 

[Mottie]

If you do not have savings elsewhere, you may be better off getting just a normal instant access savings account as you can earn up to £1,000 interest tax free as a standard rate taxpayer as they pay slightly more interest than an equivalent ISA. Only go for an instant access ISA if you are up to or over your £1,000 interest.

 

[JohnD]

Only £500 interest allowance if higher rate taxpayer.

So tax band is important

 

[gas112]

LLOYDS bank has an account that allows you to stick 400 quid a month in and pays 6.25% ,
And another that allows 250 at 5.25%

 

[JohnD]

Subject to your tax band, that sounds really good. Have a look at their Ts & Cs to see what happens if you pay in less or more, or miss a month.

The offer might have a short life.

Are you a basic rate taxpayer?

 

[Mottie]

LLOYDS bank has an account that allows you to stick 400 quid a month in and pays 6.25%

Which only works out at around 3.3% at the end of the year