Lloyds HBOS takeover

friendlyface_2

Hello all,
Ive just had my worried nan on the phone who has savings with Halifax.
She has 30k in a 3 month notice account and 21k in an ISA (both with Halifax).
I khow the first 35k is protected, it the ISA im concerned about ...the ISA would add her total saving to 51k. Would I be right to say her savings would only be protected for the first 35k or is the ISA a seperate concern and is protected seperatly?
I know the bank is a lot more secure now Lloyds has taken over but its my nans life savings and if required the savings would be moved to another bank.
Any feedback would be appreciated.
Thanks.

Wig

The excess over 35K would be at risk. I suggest transfering the ISA to a better rate, the Principality is good but others might recommend an even better ISA.

Does your nan even need an ISA, is she a tax payer (working)? If she does not work she could could register as a non-tax payer and save the tax on the 30K savings aswell.

opinions4u

Tell her to share anything over £22k out with the family.

Stop the state snatching it if she ever goes in to a home.

This is a serious post btw - will she ever spend it otherwise?

Mandark

Of course we shouldn't get too comfy about this 35k protection. It was drawn up on the assumption that may be one smallish or midsized bank might go down, not a giant like the new HBOS LTSB or nearly all of them!

jollyme

Be careful when advising older relatives about what to do with their money. It's important that they understand that you are helping and have their best interests at heart. The older generation (from my own experience) can sometimes have Very funny thoughts about their money. It is probably better that they get any financial advise from an independent qualified person eg an accountant. Of course not everyone has these FUNNY thoughts - just be careful.

friendlyface_2

opinions4u wrote: »

Tell her to share anything over £22k out with the family.

Stop the state snatching it if she ever goes in to a home.

This is a serious post btw - will she ever spend it otherwise?

Thanks for your advice. My nan is 88yrs old and still looks after herself.
My mum would look after my nan if she couldnt look after herself so a nursing home I think would be a non starter.
A look at her financial position im sure would be look at before this happened.
Regards friendlyface.

opinions4u

friendlyface wrote: »

Thanks for your advice. My nan is 88yrs old and still looks after herself.
My mum would look after my nan if she couldnt look after herself so a nursing home I think would be a non starter.
A look at her financial position im sure would be look at before this happened.
Regards friendlyface.

Thought the same for my Grandma.

Then Mum died first!!

Wig

As It is likely your nan is not a tax payer. I will ask a question on your behalf for everyone to answer if they know....

If his nan is not a tax payer, the ISA is uneccesary, and unless she is already registered with the banks as a non tax payer, she is also losing tax on her 30K savings.

If she now registers as a non tax payer...

1. How exactly does she do this?

2. Will she be able to reclaim the overpaid tax from her 30K account for the last 6 years? Or any retrospective period at all?

Nick_C

I handle my mum's affairs, and need to try to do what I believe she would do if she was capable of handling her own affairs. She has always banked with Barclays, so I have opened a Barclays ISA for her - even though she is a non tax payer - as its the best rate of interest they offer, and I don't feel it would be appropriate to move her money to another institution.

Rebchappers

Wig, i think you are wrong to assume that an ISA is unnessesary. Just because she doesnt pay tax now, doesnt mean that will always be the case. Money kept within an ISA wrapper will always be tax free regardless of the tax position of the owner. What happens if her income increases and she then becomes a tax payer? Now they have removed the lower rate tax bracket, if she had to pay tax, she would have to do so at the 20% rate.

If the funds remain within the ISA, the interest/income on it would remain tax free.

Many cash ISAs are also paying a better rate anyway for instant access.

She would need to complete an R85 from the inland revenue (avaialble at all banks and building societies) and that will register her as tax free for the current tax year and all future ones. I believe she can reclaim the tax paid in previous years by completing an R40 form (I think) and showing proof of income and interest earned.

Obviously if the government decide to withdraw or revise the current rules surrounding ISAs, then the above information may change.

Hope this helps

Wig

I agree that as long as the ISA interest rate is a good one, then keeping it in an ISA is a good "hedging your bets for future events" idea and can certainly do no harm, as long as the interest rate is decent.

My main concern was that she might be losing money on her 30K normal savings account. Thank you for advising how she should declare herself (R85) and how to reclaim past tax (R40).
:T