Tax-Efficient Ways to Save Your Money

Whatever your reasons may be for saving money, you’ll want to have the peace of mind that your money is in just the right place.

Tax-Efficient ways to save your money

Whatever your reasons are for saving, you’ll want to have the peace of mind that your money is in the right place. Whether you’re thinking of opening a savings account, or investing your money for the long-term, it’s important to be safe in the knowledge that you are getting the most from your savings – so you may want to consider tax-efficient ways to save.

There are several tax-efficient, and even tax-free, ways to save. The right one for you will depend on your circumstances, and most importantly your savings goals. In this blog we’ll take a look at the most common tax-efficient ways of saving money to help you understand which one may be best for you.

Save into a Cash ISA (Individual Savings Account)

A Cash ISA is a savings account that you can pay a certain amount into each year, and receive tax free interest on your savings. Every person in the UK (aged over 16) has an annual Cash ISA savings allowance – for the 2018/19 tax year, the allowance is £20,000.

There are many types of Cash ISAs to choose from. At Newcastle Building Society we offer variable rate Cash ISAs that come with easy access to your savings. We also provide One Year and Two Year Fixed Rate Cash ISAs, perfect for those who aren't in need of quick access to their money.

Cash ISAs are an ideal way for first time buyers to save for a deposit on their first home too. The Help to Buy: ISA is exclusively for first time buyers and offers a government bonus of up to £3,000 on top of your savings, and at the Newcastle we offer a First Home ISA that offers a bonus of up to £1,000. When used together with our CustomISA facility, you could be looking at up to £4,000 on top of your savings to help with the cost of buying your first home when you go on to complete a mortgage with the Newcastle Building Society. For more helpful information, take a look at our comprehensive guide to the government’s Help to Buy: ISA scheme.

As you can’t hold a joint ISA or roll over any unused allowance into the following tax year, it’s wise to make the most of your tax-free allowance. CustomISA allows you to split your allowance between various ISA accounts, and still enjoy the tax-free benefits. Most of our ISAs are now Flexible ISAs, meaning you can move your money in and out of your ISA without this counting towards your tax-free allowance. However, this is as long as you replace what you take out within the same tax year – find out here about how Flexible ISAs could benefit you.


Make the most of your Personal Savings Allowance

Our Regular Saver accounts also offer tax-free benefits, thanks to the Personal Savings Allowance which was introduced by the government in April 2016.

If you’re a basic rate taxpayer, you’ll be able to earn up to £1,000 in interest without paying tax, or up to £500 if you’re a higher rate taxpayer. ISA interest is not included in your Personal Savings Allowance as it is already tax free.

We hope that you’ve found our information on tax-free ways to save useful, but should you require any more information, you can call our Savings team on 0345 734 4345 or book an appointment at your local branch. Alternatively, take a look at all of our savings accounts to compare our interest rates, or apply for an account online.