Financial Resource

will lose the tax-free incentive and the money will become taxable in the year you with draw it.

If you are a lower or high rate taxpayer then you will not pay any tax on the money invested in an Isa each year. Under normal circumstances you would pay 40% on the interest received from other saving schemes. If you are a lower rate taxpayer then you would pay 20% on the interest received from other saving schemes.

Your Mortgage

At present your only hope if you have any savings is a maximum return of 1.5% per year – this is appalling and outrageous! So why not over pay your mortgage which will be on an interest rate of 4% to 7% depending on your mortgage deal.  By overpaying your current mortgage will save you many thousands of pounds in interest and you can choose to reduce the term of your mortgage as well. Imagine paying your mortgage off two or three years early. If you paid £500 per month and you were to overpay your mortgage and you paid it off three years earlier you will save £18,000 plus the interest you would not be paying in the last three years. This saving could ultimately be worth around £21,000.

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