MoneyMagpie

Apr 09

Make or save £500 a month for your cash ISA

The tax-free allowance from 1 July 2014 is £15,240 – so rather than have your savings languish in an ordinary account, we strongly recommend you make the most of the tax benefits that ISAs bring. In today’s low-interest environment, taking full advantage of your tax-free allowance is more important than ever.

Don’t have enough savings to take full advantage of your tax-free allowance? Don’t worry. If your finances are already stretched to the max, we’ve got some great ideas to help you accumulate enough savings to make a healthy looking cash ISA in a year. Anyone can do it – so read on for all the tips.

The best cash ISAs on the market

If you don’t know where to start and want the full lowdown on tax-free saving, have a look at our guide to the best cash ISAs.

For an ISA that’s easy access (that won’t penalise you for withdrawing money from your account) but doesn’t accept transfers in, we recommend:

  • MAGPIE PICK: Cheshire BS ISA Saver – 2.3% AER. At 2.3% AER, Cheshire BS’s ISA Saver is the best on the market right now. The account requires a deposit of £1,000 and allows easy access to pay in and withdraw money whenever you like.  You can apply for the account online and it takes just five minutes. This ISA includes a bonus of 1.8% (fixed until 31 October 2014).

If you want an ISA that accepts transfers in:

If you’re looking to transfer existing cash ISA funds into a better account, the current best option on the market is Santander’s Direct ISA, which offers 2% variable AER tax free for the first 12 months.  As the rate drops to 0.5% after 12 months, this is a good option for a year’s investment. It requires a minimum deposit of £2,500.

How to make or save £500 a month for your ISA

From 6 April 2015 the government has increased the amount of money you’re allowed to wrap an ISA around to £15,240 – which you can split how you like between a cash ISA and a stocks and shares ISA.

If you do the basic maths, you’ll realise that to fulfill your annual allowance of £15,240 a year, you’d need to set aside £1,270 a month. However, that might be a big ask. But if you can save £500 a month you could have a cash ISA of £6,000. Anything more you should consider putting into a stocks and shares ISA anyway.

The good news is, saving £500 might not be as hard as you think!

How do you reach that magic number? We recommend you start by…

Cutting your living costs

Try and cut the cost of your essential bills – use the Moneymagpie comparison tables to reduce your utilities, insurance and broadband bills for starters.

You could eliminate your landline phone bill completely by calling people for free over the internet with Skype, for example.

There are also many cheap (or free) things you can do to reduce your heating costs.

If you have a mortgage, you could consider remortgaging in order to get a better, cheaper deal. Our mortgage advice service can do all the research for you, and you’ll only pay a commission fee if you decide to sign up to a new deal.

Saving Value: ££££

Making money from your mobile

There are loads of companies out there who’ll pay a pretty penny for your old or broken mobile phone. Some of the better models can go for a couple of hundred pounds, so whatever you do don’t throw your mobile away before checking out its potential value. Moneymagpie has its very own Mobile Phone Recycling Tool – just enter the make and model of your phone and see which company will give you the best price for it.

Saving Value: ££

the moneymagpie mobile recycling comparison tool

Shopping wisely

Make sure you always get the best deal when you go shopping. MySupermarket can save you a packet on your supermarket shop, while other price comparison sites such as Kelkoo, Foundem, Pricerunner and Shopping.com can help you find the best price on everything from electronics to clothes to furniture.

If you’re shopping online, it’s definitely worth checking out cashback sites. They give you money back on products you buy through them (retailers pay them to promote their products; they pass on some of this money as savings to you). This can save you a fair few pennies – just make sure the product you’re buying via a cashback site isn’t available cheaper elsewhere (it doesn’t make sense to buy a TV on a site offering 10% cashback if the TV is included as part of a half-price sale somewhere else.) Websites such as Cashback Shopper have plenty of good deals, and offer you a £5 bonus just for signing up.

It’s also surprising just how many companies offer discounts when you pay using Direct Debit. Just don’t forget to include your Direct Debit commitments when reviewing your budget!

Saving Value: ££££

Claiming what’s yours…

There are more than £8 billion worth of tax credits and benefits in the UK that are going unclaimed. HM Revenue and Customs also estimates that nine out of ten families with children are eligible for some form of tax credit, but many do not bother to claim.

Use the Turn2us benefits checker to see what you may be entitled to. All you have to do is enter some details – such as how much you earn, your council tax rate and any savings you have.

It’s also worth checking to see whether you may have any dormant bank accounts or savings you’ve forgotten about. Mylostaccount is a free online service that will search through bank and building society records for you to see if you have any money lying around in a forgotten account. Up to £850 million of our own money is lying in inactive current, savings and building society accounts, so it’s definitely worth checking.

Finally, have a look at our full article on claiming what’s rightfully yours.

Saving Value: £££

Making money online

Did you know you can get paid just to search the internet and read e-mails?

You can get paid to read e-mails with Inbox Pounds. Just click the link in the paid e-mail (which will take you to the advertiser’s website) and they’ll credit your account with the money.

Another way to get a bit of cash is to fill in online surveys. Sign up to an online survey website and get paid to answer questionnaires. Normal pay rates for completing a survey can be anything from 50p to £10 – typically, the longer the survey, the higher the reward. Most surveys are fairly short and don’t take much time to complete. Sites we recommend including:

There are also more traditional ways to make cash online – why not get rid of unwanted household goods (from clothes to electronics) by selling them on eBay?

An alternative option is to use the site eBid. This is very similar to eBay, except that you don’t have to pay to list your items (called an ‘insertion fee’ that ranges from 10p to £1.90 for most items). Although (as with eBay) they do take a ‘final value fee’, of 3%.

Saving Value: ££

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Renting out your space

If you’ve got space to spare, you could make money by renting it out for thousands of (tax free) pounds a year. You could even rent out your whole house for a time. If you’re not comfortable with other people taking over your property, you could rent out a room, cellar, or attic as storage space. Another possibility is renting out your driveway (for up to £500 a month!) if you live in an area where parking places are scarce. See our article on renting for further details.

Saving Value: £££££

Making money from your journeys

Are you always driving from one place to another? Then why not get your fuel paid for – and maybe even earn some extra cash on top? Stufftosend.com matches your journey with people or companies that need packages delivered. It makes sense, saves the environment, and earns you some easy money. If you’re a motorist who’s always on the move, it could end up saving you a fair few bob.

You could also make over £200 a month with adverts on your car – our complete guide has all the info you need.

Saving Value: ££

Exercising for free

Gym membership is soaring across the UK – but if you’re one of the many calorie-burning converts, it’s worth asking yourself if your exercise regime really requires a gym. Our article on exercising for free has lots of tips to get you up and running. By binning that expensive gym membership, you could easily save upwards of £500 a year without sacrificing your fitness.

If you’re an animal lover, why not combine your love of animals with your exercise regime? You could walk other people’s dogs for them – and get paid into the bargain!

Dog-walkers normally charge per dog, per hour. Rates range from about £10–15 per dog, per hour (or half hour in some cases). If you’re able to take several dogs at once you could earn a significant amount. Read our full article about it here.

Saving Value: £££

Not paying a premium for your TV

Even the basic subscription from Sky costs over 20 per month. That comes to more than £240 a year – and that’s before adding any music, sports or movie packages.

A Freeview box, on the other hand, will only cost the price of the box itself and that’s it – no monthly subscription to worry about and you still get up to 48 channels to enjoy. Boxes start from as little as £20, so even the initial cost is pretty small.

In fact, it would save you £220 per year when compared to even the basic Sky package.

A Freeview digital box will connect to any TV in your home so there’s no need to buy a new TV set (although most new TVs will have Freeview built in). You can purchase a Freeview box from any high street electronics store. We recommend picking up Labgear’s FV300 model – you can pick it up for under £25 at Play.com. It has all the features you need and boasts much better build quality than some of the cheapo supermarket versions.

Saving Value: ££

Cutting your other entertainment costs

Life is there to be enjoyed – but if you’re conscious about saving money, there are still plenty of activities you can do that are easy on the wallet. For nights in, websites like BBC iPlayer and 4oD allow you to view your favourite television programmes for free at a time that suits you.

If you love music but don’t have the cash to splash out on CDs or MP3s, the Spotify website allows you to listen to millions of tracks online completely free (and legally!) Or if you’re a bit of a bookworm, you can swap your favourite reads with other people using the website ReadItSwapIt. It’s also worth checking out what your local library has to offer.

For going out, Tixdaq.comcompares the price of theatre, sports and gig events, enabling you to find the best price and often make great savings. If you’ve ever fancied being in the audience of your favourite TV show, websites such as ApplauseStore, SRO Audiences, TVRecordings and the BBC website give away free tickets to popular programmes. DaysOutGuide is great if you live in (or are planning to visit) London or the South East, as it contains loads of ideas and money-saving offers for great days out.

If you’ve got kids, find out how you can entertain them for less.

Saving Value: ££

Growing your own

Develop green fingers and save on your food bills by growing your own fruit and veg. As our article makes clear, you don’t need a large garden to give it a go – a patio, balcony or even a windowsill can suffice. If you do live in the country however, you can often eat for free by indulging in a bit of foraging!

Saving Value: ££

Giving up bad habits

We’ve all got our own vices, but saving money is as good a reason as any to put a stop to them. For example, if you spend a fortune on cigarettes, you could stop smoking and save £3,000 a year. Or your home might be extremely heat inefficient, but there are plenty of things you can do to rectify this and shave hundreds of pounds off your annual heating bill.

Saving Value: ££££

Cutting your motoring costs

There are loads of ways to cut back on the cost of driving.

Saving Value: £££

Making money in your spare time

There are plenty of activities you can do that will earn you a bit of extra cash in your spare time. You could become a freelance proofreader for example, and earn around £10 an hour (up to £30 an hour with the relevant qualifications).

Market-research job opportunities are often flexible and can pay around £50–70 a day. There’s no selling involved – it’s typically centred on interviewing people. Usually, no prior experience is necessary.

A fun way of making money is to become a mystery shopper, allowing you to earn cash while you shop or eat out! See our article for details and a full list of agencies that offer mystery shopping work.

If you really want to rack up your earnings, you might be surprised by how much you could earn doing something like bar work. See our full article on it and find out how you could make £490 a month by working just 15 hours a week.

We’ve loads more ideas in our most popular article 10 easy ways to make quick cash.

Saving Value: £££££

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WHAT DO YOU THINK?

3 thoughts on Make or save £500 a month for your cash ISA

  1. Hi, I notice that your link to find out more about proofreading doen’t work. Could you please advise how I can find out more? Thanks!

    Reply

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