Tax on savings??

Plus if the OPs DFs estate is sufficiently large to attract IHT and he dies within the next seven years, it's highly likely she'll inherit a sum sufficient to pay any tax due, unless he decides to leave all his money to someone else of course.

That’s not really an option though.

Number 2 is misleading. It depends entirely on the size of her father's estate. Very few people actually pay inheritance tax.

OP your ignorance on this has cost you around £2000 (the 5% interest you could have earned so far on this money if you'd put it in an instant access savings account or ISA while you decided what to do with it).

Hopefully that will be incentive enough to educate yourself so you don't get confused by nonsense that people tell you or you read online.

Look at Moneysaving Expert and Meaningful Money to learn about money and the financial flowchart for an outline of what to do in what order.

https://ukpersonal.finance/flowchart/

You need to do two things,

1. put it in tax free savings either an Instant access ISA, or a fixed term ISA for a year or Premium bonds. You can put 20k into an ISA and 40 k on PBs or 50 k in PBs and just 10 k in an ISA. This will earn you about 4.4% a year which is £2600 of free money a year ! Do this today before interest rates on ISAs change as a result of the election
2. look up how much tax you have to pay if you dad were to die in the next 7 years and take account of that when you buy. So keep back enough money to pay this without selling your new house. its 40% for the first three years, so make a note of date he gave you the money and don’t commit more than 60 % till that date. 60% of 60k is 36k plus your interest which can safely be used to use as a deposit. the rate then slowly drops to 0% at 7 years and one day.

That makes even less sense that she would randomly mention she “doesn’t know who to vote for” but immediately and falsely scaremongering on some random labour tax policy, all within a very short phone call?

You won’t be taxed on the capital, only on the interest and then only interest above a certain amount so put as much as you can into an ISA or a LISA. Ask your bank to send you a letter confirming how much interest you’ve received over the last year so you can keep track of it.

Stick some in an isa and some in premium bonds. You might win the million!!

Who knows what labour will do with savings. They aren’t likely to let people know in advance as it might piss people off. They could easily introduce a wealth tax. I would not vote for them in a million years.

You could have had that money in an instant access savings account earning £200ish a month at 4%. Why in gods name have you got it in a current account if you're low income and could therefore do with the extra money??

Your friend is nuts if they think it's the actual savings that are taxed - hopefully I've misunderstood that!

But please make your money work for you. I assume you're eligible for the 1,000 per tax year interest free on savings (just off the info in your OP). Open an easy/instant access saver somewhere and get free money every month! Chase is currently offering between 4.1% and 5.1% and it's easy to open. It's a lot of money to say no to!

OP - innocent enough post perhaps but this is how people’s votes can be influenced - based on either lies or completely misunderstanding (as you have).

Media thrives on soundbites.

I only mentioned labour because my friend told me earlier today that she wasn't sure who to vote for and mentioned about the tax on savings.

🤦‍♀️

Inheritance tax is payable on the deceased estate, NOT the individual to whom they've given money. Your dad's estate would be treated as if it still had the cash and taxed accordingly. You won't suddenly get a bill for inheritance tax.

Jesus Christ - does your friend think the actual savings are taxed??

Give over, it's a scare tactic. If you needed to know how tax on savings works, which you claim not to, you would ask about that. Not how it might work if Labour win.

If you open an account with, say, Chip you can put £20,000 in an easy access ISA and get £1,020 p/a tax free (current rate is 5.10%) and the rest in an instant access savings account at 4.84% (£2,904 p/a). You will most likely pay tax on the latter but you’ll still be better off. Both these accounts are accessible at any time without penalty, in case you decide to bite the bullet and buy.

Alternatively you could put £50,000 of the remaining money (after the ISA) into Premium Bonds (you can’t invest more than £50,000). Any winnings are tax free.

Either way - you should get that money working for you!

https://www.moneysavingexpert.com/savings/savings-calculator/

Have a play around with this calculator. If you save your £60000 in an account at 5% interest adding only £10 a month to it ( i couldn’t leave it at 0) you’ll have over £70000 in only 4 years. Get the 20k into an isa now and another £20 k in next April and you’ll have more as no tax to pay.