Teena 

Gould

  Studio Ceramics and Public Art
       
Articles    

Saving for your art

Saving up for something special, such as a prized piece of artwork, has never been harder. Interest rates are at rock bottom as we are encouraged to spend not save. For the savers out there, it comes as no surprise that interest rates have been cut in half since 2008. According to the Office of National Statistics this means savers in 2009 only earned £19 million in interest compared to £39 million in 2008. So where can we put our money? If you want to be able to afford a new piece of art then you really need to know where the best interest can be earned.

However, there is some good news for people wanting to save. The new tax year brought with it a rise in the ISA allowance. The £10,200 amount has been extended from the over 50's to everyone over 16. This increased allowance means more of our money can earn tax-free interest. Which basically means free money, making that new piece of art you buy with it all the sweeter.

The sooner you invest in a tax-free ISA the better. If you invest at the start of the tax year, instead of rushing to set up an account at the end of the year you are effectively getting an extra year of tax-free saving. Whether you have a lump sum or not, it is still worth getting on the ISA bandwagon as soon as possible.

If you do have a lump sum to invest and a longer time frame to play with then you are lucky enough to be able to benefit from fixed-rate ISAs. Fixed-rate ISAs have much better rates meaning you will make more money. The best rates are on deals locking your money away for five years, but you can still find attractive rates on two and even one year programmes.

If you have less to invest and need more flexibility then you should get an instant access ISA. ISAs allow you to make small and regular payments – all of which fall under the tax-free wrapper – so you don't need to have lots of money to start with.

Santander offers some of the best instant access savings accounts right now. Its flexible ISA is offering 3.2% AER, which will not fall in the next year and it guarantees to pay 2.7% above the Bank of England's base rate for the first 12 months. It allows instant access, there is no penalty to pay for withdrawals and you can start the account with just £1.