Most people know that people in the United Kingdom don't usually save money. Studies show that people spend much more than they save, and saving money is not as popular as it used to be. Saving is a very important thing to do if you want to have a good life in the future. Think about what would happen if your car stopped running all of a sudden. What would you do if your home's heater or fridge just stopped working one day? What would you do if you had to leave right away because of an emergency and needed to travel?
Putting your money in an account is a great way to have money on hand in case of an emergency. It makes a lot of sense to save money in an account that pays interest for these kinds of things instead of taking out a loan or charging them on a credit card. If you do either of these, you'll end up with more debt and have to pay more in interest. Many experts say that you should set your priorities in the right direction and try to save the same amount of money over three months as your salary.
Many people may find this to be a lot of money to put back when they have bills to pay. That's fine, just try to save as much as you can without putting yourself in a worse situation. If you saved just GBP100 every week for three months, you would have saved GBP1,200 (not counting any interest). That's probably enough to pay for a broken refrigerator or a large portion of a new or fixed heater. You can choose from many different kinds of savings accounts, some of which don't even require a big deposit.
Usually, a bank will take a tax out of the interest before adding it to your savings account. For example, a basic rate taxpayer will be taxed twenty percent, while a higher rate taxpayer will be taxed forty percent. No taxes are taken out of the interest for people who don't pay taxes. If you don't pay taxes, you'll need to fill out a R85 form. This will let you avoid taxes and get all of the interest that has built up on the account.
Individual Savings Accounts (ISAs) are something that everyone should think about. The government of the United Kingdom made these kinds of accounts to encourage people to save money. In this account, you can save up to GBP3,000 a year tax-free, which means you won't have to pay taxes on it.
