Advertorial feature

A cash ISA can be very handy for unexpected expenses

 

Having money in a cash ISA can really help when big, unexpected expenses crop up, such as your boiler packing up in the cold winter weather. Or emergency renovations to your home. Life’s full of unexpected surprises. So having a little bit of money put by can help to give you real peace of mind.

An ISA is an Individual Savings Account. And every tax year you get a tax-free cash ISA limit - which is currently £5,640 for the tax year 2012/13. You can pay in up to the maximum, but no more during each tax year. Tax treatment depends on your individual circumstances and may change.

With variable cash ISAs, you can pay in by standing order, lump sum or as and when you like - so it gives you greater flexibility for deposits but the interest rate you earn will also be variable. You can also normally withdraw as and when you like too. But if you take money out, you won’t be able to simply put it back in if you've already reached your limit of £5,640 for this tax year 2012/13. So if you've already paid £5,640 into your cash ISA for this tax year - and you take out £1,000 - you won't be able to put the money back in until the new tax year. So always think twice before you take your money out.

Here are a few things that may come along where you might need to dip into your savings:

Car replacement and repairs

Cars are expensive - and fixing them can over time sometimes cost nearly as much as the car itself. From replacing head gaskets to covering the cost of accident repairs, you could spend hundreds, and possibly thousands, of pounds on putting things right.

House renovation

Keeping your home in tip-top condition can be pricey. Especially if you have an old house, as the years can be unkind to its structure. Unexpected repairs and maintenance, like fixing the roof, can really put a strain on your finances.

Replacing home items

Fridges, freezers, cookers, boilers. There are plenty of things in most people's homes that are worth hundreds of pounds. And if you don’t have adequate insurance in place to replace them if they break, you could be saddled with a whopping bill.

Unforeseen tax bills

Although it's always good to plan ahead for tax bills, sometimes self-employed people can be caught out if they don't put enough money aside. And depending on what you earned that year, your bill could be hundreds or thousands of pounds.

There are so many expenses that might crop up without any notice at all. So look at different ISA rates when you're shopping around to find the right variable rate cash ISA for you. And once you've built up a nice little pot of money, you can stop worrying about what life might throw your way.

Start your day with The Independent, sign up for daily news emails
Suggested Topics
Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
Put the phone down on the coldcallers who see pension liberation as an opportunity to liberate your pension from you

The 'no-hang up' scam targets vulnerable people - and your bank may not protect you

Unscrupulous crooks prey on older people to trick them out of their savings

Money Insider: How to make credit cards pay

Andrew Hagger reveals how to get the most from your plastic

Questions of Cash: My 'perfect travel companion' from the Post Office was a waste of money

One reader purchased the Post Office Travel Money Plus Card for a motoring holiday but discovered it can't be used at self-service petrol stations or autoroute toll booths

Continuing low interest rates are encouraging more people to switch to interest-only mortgages

Interest-only mortgages return to give more flexibility to borrowers

The credit crunch put a temporary end to these once-popular mortgages. But lenders are waking up to rising demand and relaxing their rules

EU to scrap roaming charges in 2017: European Commission under fire for taking so long to act

UK consumer groups complained that British holidaymakers face another two years of mobile phone misery before the law comes into effect

On the money: Yorkshire building society has demonstrated that it is taking the P2P industry seriously

Is peer-to-peer lending a risk worth taking?

The P2P industry must do more to shake off an unjustified image of being too complex and risky for the everyday saver, says Andrew Hagger

Generating grievances: Scottish Power's Longannet station in Fife

Questions of Cash: Scottish Power says it's sorry - again and again

Six of the energy company's customer have cause to blow a fuse this week

Will Patisserie Valerie be the portfolio's sweet spot?

Derek Pain: 'Patience is a virtue but maybe I should cut and run'

Derek's portfolio is currently suffering because of his failure to be more ruthless

There are now more than three million people in “severe problem debt”

Debt managers are misleading vulnerable people, warns watchdog

One debtor was given a repayment plan that would have taken 125 years to repay

Challengers are smashing the traditional high street banks when it comes to offering decent savings rates

Ignore the new breed of savings institutions and you'll lose interest

NatWest has ripped up its pledge to never be the last bank in town

NatWest pledged five years ago it wouldn't close the last bank in town. Now villagers have been told the branch shuts in September

When the last bank closes, local shops quickly go out of business

Under new state pension rules we will all be much worse off

Why did no one notice? The Government hides behind complexity, says Neasa MacErlean

Bogus Islington landlord scams public for £20,000 in fake deposits

It’s not just Islington... Simon Read warns renters and landlords about a nationwide fraud operation

Questions of Cash: The paperwork wasn't right so I was left high and dry with a broken washing machine

A reader encountered a problem with a Currys washer/dryer care plan

Borrowers should steer clear of established providers to get the best rates

Interest rates have never been cheaper if you want a five-figure personal loan but for lower-value loans it's a very different picture

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    competitive: SThree: Are you passionate about sales?Do you have a keen interes...

    Recruitment Genius: Loan Adviser - OTE £30,000

    £17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Sales Assistant / Buyer

    £15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

    Day In a Page

    Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

    EU 'family' needs to forgive rather than punish an impoverished state

    An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
    Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

    Gaza, a year on from Operation Protective Edge

    The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
    How to survive electrical storms: What are the chances of being hit by lightning?

    Heavy weather

    What are the chances of being hit by lightning?
    World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

    World Bodypainting Festival 2015

    Bizarre and brilliant photos celebrate 'the body as art'
    alt-j: A private jet, a Mercury Prize and Latitude headliners

    Don't call us nerds

    Craig Mclean meets alt-j - the math-folk act who are flying high
    How to find gold: The Californian badlands, digging out crevasses and sifting sludge

    How to find gold

    Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
    Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

    Not born in the USA

    Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
    10 best balsamic vinegars

    10 best balsamic vinegars

    Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
    Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

    Greece referendum

    Greeks say 'No' to austerity and plunge Europe into crisis
    Ten years after the 7/7 terror attacks, is Britain an altered state?

    7/7 bombings anniversary

    Ten years after the terror attacks, is Britain an altered state?
    Beautiful evening dresses are some of the loveliest Donatella has created

    Versace haute couture review

    Beautiful evening dresses are some of the loveliest Donatella has ever created
    No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

    No hope and no jobs in Gaza

    So the young risk their lives and run for it
    Fashion apps: Retailers roll together shopping and social networking for mobile customers

    Fashion apps

    Retailers roll together shopping and social networking for mobile customers
    The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

    Gaping hole at the heart of the European Union

    Treatment of Greece has shown up a lack of genuine legitimacy
    Number of young homeless in Britain 'more than three times the official figures'

    'Everything changed when I went to the hostel'

    Number of young homeless people in Britain is 'more than three times the official figures'