What to do with money?
Discussion
I find myself in the very fortunate position that I've maxed out my ISA allowance for this year, maxed out my premium bonds allowance and maxed out the same for my wife, I now don't know the best place to continue saving, with the least amount of added tax.
I pay 10% of my income in to my pension so don't really want to increase my contributions.
Are there any other tax free savings accounts, I can take advantage of?
I will need access to my cash, as I'm hoping to start an extension within the next 12 months now my planning application has been approved.
Any help welcome
I pay 10% of my income in to my pension so don't really want to increase my contributions.
Are there any other tax free savings accounts, I can take advantage of?
I will need access to my cash, as I'm hoping to start an extension within the next 12 months now my planning application has been approved.
Any help welcome
I'm 4 years older than you and any spare I have goes straight in the pension. For me tax relief makes it an easy decision... At your age you'll get 30+ years of compound growth on that tax relief.
Or if you want access for when mortgage renews you could get a general investment account and crystalise any capital gains at the end of the tax year.
Or buy an mx5 /ph
Or if you want access for when mortgage renews you could get a general investment account and crystalise any capital gains at the end of the tax year.
Or buy an mx5 /ph
Milner993 said:
I'm currently 36 so I'm along way from being able to draw down on my pension, although paying more in to my pension pot seems like the obvious choice, I would like to benefit from returns much earlier.
The more you put in your pension now, the greater the compounding effect and the more you'll have later. It may even mean you can reduce your hours or retire early if you have an adequate amount later in life. You'll be thanking yourself. Especially as it's seems you don't know what to do with the cash. Plus it's generally easy enough to change your contribution amount. Up or down.I am nowhere near maxing ISA and pb limits, but am putting in 18% (plus 8% from the employer) and am younger than you.
I would love to do the PH thing and buy a nice TR6, but it's just not on the cards.. Just yet!
Let's say I up the pension contributions again which is honestly the most logical thing to do, I still want some money set aside but don't want it to sit there doing naff all, what option would you take?
Let's say I up the pension contributions again which is honestly the most logical thing to do, I still want some money set aside but don't want it to sit there doing naff all, what option would you take?
are we missing something here?
OP talks about longer term - as in wants money to be more accssible than a pension, wants it to grow, but has a 1 year time horizon?
if you really do want those monies in 12 mths or so, unless you're clever around stocks etc, then to have the security that those funds will be there in 12mths, sounds like a normal deposit acc jobbie.
If i've misunderstood - GIA with a few solid shares that you can leave well alone for a few years, no tax liability until cashed out and then straightforward CGT.
OP talks about longer term - as in wants money to be more accssible than a pension, wants it to grow, but has a 1 year time horizon?
if you really do want those monies in 12 mths or so, unless you're clever around stocks etc, then to have the security that those funds will be there in 12mths, sounds like a normal deposit acc jobbie.
If i've misunderstood - GIA with a few solid shares that you can leave well alone for a few years, no tax liability until cashed out and then straightforward CGT.
OP, I think we're all finding your post a bit ambiguous. But if the question is "I have money all of which I'm going to spend on an extension in 12m time, where should I put it?" then I believe you're correct: you've used up all the "easy" tax free options. While it would be nice for the money to grow, what you need to ensure is that it doesn't depreciate as a result of inflation. Savings account of your choice - in the name of the lowest contributor to HMRC. Remember the FSCS limit of 85K and split it as necessary.
When the bills for the extension start to come through, spend that money first.
I guess the high risk zero-tax strategy is to put a GT3 in a climate controlled warehouse for a year...
When the bills for the extension start to come through, spend that money first.
I guess the high risk zero-tax strategy is to put a GT3 in a climate controlled warehouse for a year...
Spend it doing something amazing.
You're in a good financial position.
I'd buy a race car and go racing. Something like a caterham. £20k for the car. £20k/year budget for entry fees, transport, testing, team support. Sell the car when you've had enough for £20k ish (near zero depreciation).
Use it to create some memories.
You're in a good financial position.
I'd buy a race car and go racing. Something like a caterham. £20k for the car. £20k/year budget for entry fees, transport, testing, team support. Sell the car when you've had enough for £20k ish (near zero depreciation).
Use it to create some memories.
Apologies if I haven't conveyed my intentions quite as clearly as I thought.
Let me try again - mine and the wife's current savings within our ISA's and Premium bond accounts have both been maxed out, the money within these accounts have been earmarked for our extension, so we don't intend to touch or move any of it until such a time is required.
What I was hoping to find out was, are there any other saving accounts or ways to save that we're maybe unaware of, which are also tax free, or offer a decent return that we should be looking at for future savings to be deposited in to?
What I don't want to happen, is there be large sums of money sat within current accounts not doing anything, or end up in accounts where I receive poor returns or pay higher tax than I need to.
I'm already contributing a healthy sum of money to my pension each month, but could always increase my contributions, however, I'm looking for more accessable savings as I may need access to the cash in 12 months, after our main savings pot has been depleted by the home extension.
Hopefully I've been a little clearer on what I was looking to achieve, if not the GT3 idea seems like a good one so maybe il do that
Let me try again - mine and the wife's current savings within our ISA's and Premium bond accounts have both been maxed out, the money within these accounts have been earmarked for our extension, so we don't intend to touch or move any of it until such a time is required.
What I was hoping to find out was, are there any other saving accounts or ways to save that we're maybe unaware of, which are also tax free, or offer a decent return that we should be looking at for future savings to be deposited in to?
What I don't want to happen, is there be large sums of money sat within current accounts not doing anything, or end up in accounts where I receive poor returns or pay higher tax than I need to.
I'm already contributing a healthy sum of money to my pension each month, but could always increase my contributions, however, I'm looking for more accessable savings as I may need access to the cash in 12 months, after our main savings pot has been depleted by the home extension.
Hopefully I've been a little clearer on what I was looking to achieve, if not the GT3 idea seems like a good one so maybe il do that
I'm not sure withdrawing from your ISAs for a house extension makes sense, given you have other spare money available that you're looking to put to work.
Assuming the ISAs are in an average performing S&S setup, they'll be making as much return as borrowing money for the extension would cost, and once you take the money out of the ISAs you can't put it back.
I get that you're some way off accessing pension funds but, assuming no issues with LTAs, they're very tax effective. As an example, a 40% taxpayer gets, effectively, an immediate 66% boost to any money they put in (contribution limits notwithstanding) which is surely impossible to beat.
So my own thinking would be: keep maxing the ISAs, borrow for the extension if needed, maximise tax benefits available on pension contributions.
Anything else left after that is a nice problem to have,,,
Assuming the ISAs are in an average performing S&S setup, they'll be making as much return as borrowing money for the extension would cost, and once you take the money out of the ISAs you can't put it back.
I get that you're some way off accessing pension funds but, assuming no issues with LTAs, they're very tax effective. As an example, a 40% taxpayer gets, effectively, an immediate 66% boost to any money they put in (contribution limits notwithstanding) which is surely impossible to beat.
So my own thinking would be: keep maxing the ISAs, borrow for the extension if needed, maximise tax benefits available on pension contributions.
Anything else left after that is a nice problem to have,,,
Milner993 said:
Apologies if I haven't conveyed my intentions quite as clearly as I thought.
Let me try again - mine and the wife's current savings within our ISA's and Premium bond accounts have both been maxed out, the money within these accounts have been earmarked for our extension, so we don't intend to touch or move any of it until such a time is required.
What I was hoping to find out was, are there any other saving accounts or ways to save that we're maybe unaware of, which are also tax free, or offer a decent return that we should be looking at for future savings to be deposited in to?
What I don't want to happen, is there be large sums of money sat within current accounts not doing anything, or end up in accounts where I receive poor returns or pay higher tax than I need to.
I'm already contributing a healthy sum of money to my pension each month, but could always increase my contributions, however, I'm looking for more accessable savings as I may need access to the cash in 12 months, after our main savings pot has been depleted by the home extension.
Hopefully I've been a little clearer on what I was looking to achieve, if not the GT3 idea seems like a good one so maybe il do that
You wrote pretty well the same as your first post! Answer is still no. Let me try again - mine and the wife's current savings within our ISA's and Premium bond accounts have both been maxed out, the money within these accounts have been earmarked for our extension, so we don't intend to touch or move any of it until such a time is required.
What I was hoping to find out was, are there any other saving accounts or ways to save that we're maybe unaware of, which are also tax free, or offer a decent return that we should be looking at for future savings to be deposited in to?
What I don't want to happen, is there be large sums of money sat within current accounts not doing anything, or end up in accounts where I receive poor returns or pay higher tax than I need to.
I'm already contributing a healthy sum of money to my pension each month, but could always increase my contributions, however, I'm looking for more accessable savings as I may need access to the cash in 12 months, after our main savings pot has been depleted by the home extension.
Hopefully I've been a little clearer on what I was looking to achieve, if not the GT3 idea seems like a good one so maybe il do that
I know you don’t want to put more into your pension but is 10% the total going in there?
Edited by Sheepshanks on Friday 2nd August 23:08
Wombat3 said:
You should avoid touching your ISAs as far as possible.
So just put it on deposit to use for your extension. Your time horizon is short, don't overthink it!
This.So just put it on deposit to use for your extension. Your time horizon is short, don't overthink it!
You should avoid withdrawing from your ISAs to fund the extension; you can’t get the tax allowances used in previous years back. Instead treat them as a more flexible form of pension saving (access when you like, and income drawn from them is tax free).
If you want to pay as little tax as possible, investing in a gilt is a smart move. The capital gain is tax free and if you choose one with a very low interest rate, the taxable interest will be minimal https://www.yieldgimp.com/gilt-yields shows what's available. Simple explainer here https://www.hl.co.uk/shares/corporate-bonds-gilts/...
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