Quick guide to saving options…
Despite your differing circumstances, you may have money to save that can be put away for when you and the family need it. Here are the main savings products:
Banks and building societies savings accounts
The thing to remember with savings accounts is that you’ll always get back at least the money you paid in – plus interest at the rate advertised. There are a wide range of accounts to choose from – the key differences being how quickly you can get at your money, the minimum amount required to keep the account open and the type and rate of interest rate paid.
Cash ISAs (Individual Savings Accounts)
You’ll find most banks and building societies also offer tax-free savings and investment accounts called ISAs. The cash ISA generally contains only cash, so there’s no risk to your money.
For the tax year 2009-10, you can save up to £3,600 in a cash ISA if you’re a UK resident aged 16 or over. From 6th October 2009, people aged 50 or over can save up to £5,100 in a cash ISA.
This new limit will apply to everyone from 6th April 2010.
National Savings and Investments
National Savings and Investments (NS&I) are savings and investment products backed by the government. As a result, any money you invest is totally secure. NS&I offers tax-free products (including premium bonds); products offering guaranteed returns; monthly income products; children’s savings products – and more.
Another option is Credit Unions. They are mutual financial organisations, which are owned and run by their members for their members who can save with them. Once you have established a record as a reliable saver, they will also lend you money but only what they know you can afford to repay. Members have a common bond, such as living in the same area, a common workplace, membership of a housing association or similar.