Question about savings and ISA

[RosieLeaLovesTea]

I don’t have an iSA. I have approx £40,000 in a savings account but it’s not an ISA. Should I put the max into an ISA? I’m not saving regularly for me as overpaying in the mortgage. I save each month for the kids approx £1200 per year. They now gave about £10000 each. Ian a bit worried about them having this all in one go once they reach 18. Should I add this to an ISA if I open one? To keep it for them in future years?

If you don't need quick access to it put it in an isa in your name.
You should keep back some for emergencies (we do 10k but have an annoying old house.. 5k is probably more than enough,)

You can do 20k per tax year.
Put 20k in now for 24/25 and in april do the other 20k for 25/26
I like vanguard and AJ bell

Use a fund not individual shares: s&p500 for example.

Keep back any further savings and add to isa in 26/27 tax year.

I personally wouldnt put any money in your childrens names or a JISA (you cant afford to)
I would only open a jisa if in the event they were to pour it down the drain it would be a bad and painful lesson but not catastrophic. (Ie there are still funds for uni / a deposit).

I have no clue about stocks and shares ISAs -where would I start?

Yes get it in an isa, you get taxed on interest in a savings account if you earn over £1k as a standard rate tax payer. You could get 20k in now before your allowance resets in April.

Try opening an account with a platform such as Halifax share dealing, they have low fees. You can then invest in a fund such as a global tracker. Prices can go up and down...

@RosieLeaLovesTea you know there are various types of ISA s including cash ISAs? And various types within those, e,g fixed term - guaranteed interest rates over the term of one year, 2 year etc….or variable rate, usually on easy access.

Advantage of cash ISA over an ordinary savings account is that tax isn’t deducted from the interest you receive….at the moment you must be getting taxed on your savings interest.

I definitely wouldn’t tie up all your money and the DCs money in stocks and shares ISA.. It won’t be as easily available and the value of the ISA can drop if the stock market drops. The exact mix between cash and stocks and shares is your decision, and would be worth thinking about.

A good start would be to use your ISA allowance for this tax year (£20,000) and set up a cash ISA. You can always transfer this into a stocks and shares ISA at a later date if you want to. Do the same when the new tax year starts in April. Meanwhile start reading around and considering what you might need short term and longer term. Martin Lewis’s Money Saving Expert website is a good place to start. You have a fund of about £60,000, which is great, and you mention that you have a mortgage. It may even be cost effective to pay for an hour or 2 of advice from a financial advisor, which will address your circumstances and goals far better than strangers on an internet forum can.

Before engaging a financial advisor keep a careful eye on the fees for any product they recommend. You can invest very cheaply these days, for less than 0.5% per annum in an index fund. There are still, incredibly, funds and brokers around that charge a staggering 2% a year, it's daylight robbery.