Councils allow you to spread your council tax payments throughout the year. But to ensure that they have the money in before the end of the financial year, they allow you to spread it over 10 months rather than 12. This means that in February and March you could have several hundreds of pounds spare in these months.
My council tax is £216 per month. This means that over February and March I will have an extra £432 in my pocket. Rather than letting the money be swallowed up by day to day spending, here are a few money facts to encourage you to squirrel it away.
Now if you put this amount of money away every year for 30 years in a cash account getting 1% interest each year, you would have £15,106.62 at the end.
If you decided to put this into a stocks and shares ISA for 30 years and got 5% return on average each year, you would have £29,961.31.
If you decided to put this into a pension (same assumptions as the ISA) and you are a basic rate tax payer you would have £37,451.64. If you are a 40% tax payer, the tax relief would increase this to £49,935.52.
Another option would be to over pay your mortgage with this money. If you have a mortgage of £250K on an interest rate of 3.5% over 25 years, this would clear your mortgage 1 year and 1 month early plus you would save yourself £6,132 in interest too.
All of these are great option – which one will you choose?
I would love to hear your stories!
Lots of Love
Miss Lolly xx