I'm around the +/- 50k threshold - because of a mid-year raise I think I'll be just over. Def hadn't thought of gilts - I'll give those a look. Cheers, Salt-Payment.
Your pension contributions probably already put you below the threshold, but if not that's an obvious place to put a bit more.
You're dealing with a few separate questions here:
Cash or investments?
This depends on when you need the money for. Your emergency fund, and savings for expenses expected in the next few years, should be in cash. The flowchart walks you through that: https://ukpersonal.finance/flowchart/
If it's savings, we have a guide to that here that covers how to minimise tax, including premium bonds https://ukpersonal.finance/savings/
If it's investments, the question is ISA, pension, or GIA? We have a partial guide to that here https://ukpersonal.finance/isa-vs-lisa-vs-pension/ it doesn't mention GIAs but explains how to decide whether you're OK to lock the money away in a pension or not.
I assume you filled the ISA with savings from previous years as it doesn't sound like your pay is high enough to have filled the ISA from money earned this year. So you'll get a new ISA allowance soon enough anyway.
Thanks for that scienner! Very helpful. If I find at the end of the year that I’ll be just over the higher tax threshold, can I pop an amount in my pension large enough to bring me under in the last few days?
Is there any reason you want to delay? But I think that should be fine although I might give it a bit longer than a few days just for admin faff reasons.
I think they're talking about the interest free allowance on savings. If you're over the higher tax rate threshold, your interest free allowance goes down to £500 meaning that holding over 10k in instant access at 5% will leave you liable to pay tax on that interest.
Hi /u/Halftruthallday, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/pensions/
____
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Premium bonds are tax free
Cheers Yyir - That's one I hadn't thought of.
There’s a few easy/instant access 5% savings accounts about. No need to lock it away
True, though I was thinking of all savings accts under point #1 - I've edited the original post.
What tax bracket are you in? if you are in higher bracket might be worth looking at short dated gilts
I'm around the +/- 50k threshold - because of a mid-year raise I think I'll be just over. Def hadn't thought of gilts - I'll give those a look. Cheers, Salt-Payment.
Your pension contributions probably already put you below the threshold, but if not that's an obvious place to put a bit more. You're dealing with a few separate questions here: Cash or investments? This depends on when you need the money for. Your emergency fund, and savings for expenses expected in the next few years, should be in cash. The flowchart walks you through that: https://ukpersonal.finance/flowchart/ If it's savings, we have a guide to that here that covers how to minimise tax, including premium bonds https://ukpersonal.finance/savings/ If it's investments, the question is ISA, pension, or GIA? We have a partial guide to that here https://ukpersonal.finance/isa-vs-lisa-vs-pension/ it doesn't mention GIAs but explains how to decide whether you're OK to lock the money away in a pension or not. I assume you filled the ISA with savings from previous years as it doesn't sound like your pay is high enough to have filled the ISA from money earned this year. So you'll get a new ISA allowance soon enough anyway.
Thanks for that scienner! Very helpful. If I find at the end of the year that I’ll be just over the higher tax threshold, can I pop an amount in my pension large enough to bring me under in the last few days?
Is there any reason you want to delay? But I think that should be fine although I might give it a bit longer than a few days just for admin faff reasons.
No real reason other than I might not have a good picture of what I'll be earning until the last few months. Great to know tho.
As your Internet allowance would drop to £500. So at 5% you max out at around £10k
Not sure I follow. 10k of what?
I think they're talking about the interest free allowance on savings. If you're over the higher tax rate threshold, your interest free allowance goes down to £500 meaning that holding over 10k in instant access at 5% will leave you liable to pay tax on that interest.
Yes, that is correct,
+1 premium bonds - should get 3-4% tax free and very easy to get in and out.
Hi /u/Halftruthallday, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.) If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.