Savings/ tax efficient ways to save

[mobear]

I have some money that I need to invest. I’ve maxed out my premium bonds and set up a fixed rate ISA. Are there any other tax efficient ways to save?

I’ve also put some in a fixed rate savings account and a high interest easy access account, but I still have a bit more money to find a place for (which I can tie up, I don’t need access to it for at least 2 years).

Are you saying you've used all your £20k annual ISA allowance this year? Do you mean save or invest?

If you can wait until you're 55/57+ to access the money, you could put it into a pension, then you'll get tax relief on that (although could depend on how much you earn).

If you have a mortgage, you could overpay.

Otherwise that's probably it, although it might be worth getting advice from an IFA as it sounds like you're one of the few people where it's actually worth doing, ie if you've used up your ISA allowance, can't do any of the above and potentially have a significant amount of money to work with.

There was a similar thread a couple of weeks ago:

https://www.mumsnet.com/talk/money-matters/4818245-paying-tax-on-interest-from-savings?page=1

Don't fixate solely on avoiding tax on interest - once you've used all your tax-free options, compare income from taxed-interest vs tax-free and you might find the difference negligible as many taxable-savings accounts offer higher interest rates than tax-free accounts. And as someone on that thread pointed out, the interest rates on savings accounts a couple of years ago was so dire that you'll get far more now, even if it is taxed.

Thanks both. Yes, I’ve used my ISA allowance for this year and we are mortgage free. I’m not sure I can tie the money up until pension age (yet) so holding off doing that for now. I do have a company pension which I contribute to already.

We're shortly about to get a lump sum from our remortgage which we'll be saving for 5 years until needed for school fees - and then it'll be drawn down on over a few years. Fixed ISAs should be your main focus - £20k this tax year, then next, then next etc depending how much you have. We will be immediately putting £40k (£20k each) into Fixed Rate ISAs then another £20k next April. The remainder will be on a fixed term saving account so we may be eligible for tax on interest but if it's joint then that's shared. Then in the next tax year when that matures it'll be put in a fixed ISA. In short we have £75k to save which will all eventually make its way into a fixed rate ISA.

There are other tax wrappers you could look at but they generally involve an element of investment risk, which makes them more suitable for timescales of 5+ years.

If you are married, has your spouse got any unused ISA allowance?

Not married, and my partner uses all his ISA allowance each year anyway. The tax wrappers, are they risky because HMRC might not sanction them (such as with numerous SDLT schemes which have been invalidated after the fact) or is there a risk to the underlying investment?

I’ve got several £100,000 to place so I will max out my ISA every year but it will take a while to get it all invested this way.

If you invest in index funds in a general account you'll only pay Capital Gains Tax on any growth in value of the part you withdraw (e.g to move into ISA). If the sum of gains is under your annual tax free allowance (currently around £5k) there's no tax to pay at all.

This sounds like the route for you if you can deal with the risk of capital losses (after five years of investment, historically, the risk of loss has been very low).