Hallifax advised me their own product is crap!

debbie42

large_satsuma wrote: »

Then she totted up the actual amount and said "That return on six grand? That's rubbish".

It isn't a return on six grand, though. You don't put 6K in at the beginning and leave it there for a year. You only have 6K (max) in the account for the last month.

debbie42

large_satsuma wrote: »

So if I decide I have zero tolerance for risk, then would I advised to put my full tax-free allowance into a cash ISA before contemplating a regular saver?

If you pay tax at 20% then you'd net 8% with the Halifax Regular Saver. If you pay it at 40% it would net down to 6%. So, it depends on your circumstances: there are cash ISAs around that pay over 6%.

You also have to bear in mind that you only get £3600 allowance for each year, and once the ISA amount is invested it is sheltered from tax whilst it's in there, unlike the cash in a normal savings account outside.

poppyolivia

I got told £200 per month for 12 months would be £130 interest ...I thought it would be more????

large_satsuma

Thanks for the support, Scousebird, but I think the "virtual guarantee" of 10-20% I mentioned may only have been my misunderstanding of what I was told. I really am pretty dense about this stuff (despite 149 IQ... sigh).

Luckily, I'm no mug and NEVER trust anyone who seems to have even half an eye on my hard-earned.

Again, I don't want to malign the Halifax unfairly, but the general reaction here does lead me to think I was a victim of pressure-selling. Interesting that Callow had the same experience. Anyone else?

debbie42

poppyolivia wrote: »

I got told £200 per month for 12 months would be £130 interest ...I thought it would be more????

That's about right, but that's gross interest, using 10%, before any tax due. You can check out returns using the calculator here.

poppyolivia

debbie42 wrote: »

That's about right, but that's gross interest, using 10%, before any tax due. You can check out returns using the calculator here.

Aye thats right just checked!..My head was absolutely buzzing..I swear I'm not doing that by myself again!;)

cheers x

large_satsuma

debbie42 wrote: »

If you pay tax at 20% then you'd net 8% with the Halifax Regular Saver. If you pay it at 40% it would net down to 6%.

Forgive my continued denseness, but why would your tax circumstance affect what interest you earn on a savings account? Aren't the two things unrelated?

Having recently gone freelance, I've not much idea what my annual income will turn out to be, never mind what tax bracket I'm in. Perhaps that means I should err on the side of caution, risk-wise.

Mikeyorks

poppyolivia wrote:

I got told £200 per month for 12 months would be £130 interest ...I thought it would be more????

You only get 10% on the money that's actually in the account at any one time. You only have £200 in for a full year! The rest is in for 11 months / 10 months etc. So, you finish with an average £1200 in there at 10% ..... which works out just better than £120 gross interest. Read this bit of Martin's article on Regular Savers :-

http://www.moneysavingexpert.com/savings/best-regular-savings-accounts#dont

large_satsuma

Wait, debbie, the penny's just dropped. Told you I was dense. It's because the interest is taxable.

Hey - I knew I'd get brighter hanging out with you financial-brains!

debbie42

large_satsuma wrote: »

Forgive my continued denseness, but why would your tax circumstance affect what interest you earn on a savings account? Aren't the two things unrelated?

Not at all: there is a direct link.

You are liable for tax on savings interest. If you are a basic rate tax payer (i.e. 20%) you pay 20% on interest received. Normally the bank will deduct this at source. If you don't want them to, i.e. you shouldn't be liable for the tax you have to fill out an R85 form to receive it gross. If you should be paying a higher rate then you have to advise HMRC (there is a section for it on a tax return).