£65,000+ in savings

BluePanther

Hi All,

I see that if one has over £65,000 in savings that the CSA will want to take some of the interest paid on it to give to the PWC.

Does anyone know what percentage of the interest the CSA will take for 1 child, 2 children or 3 children?

Thanks,
BP

Rebe

Hi, I know that for one child its 15% and 2 or more 20% this is all attachment to earnings though I think, not entirely sure about the savings though, sorry if this is no help what so ever!

Rebe

pinkpig08

The percentages are 15% for 1 child, 20% for 2, and 25% for 3 or more. Again don't know about the savings.

BluePanther

Rebe and pinkpig08,

Thank you for your replies. I know about the %ages for income because the CSA has made them available, but the CSA does not give any information on %ages for interest on savings above 65k and that is what I would like to know.

Anyone?

LittleJohn

Hi My understanding ofthis is that if the asset exists the CSA will say that 8% of the asset over 65k is income and then apply the 15,20.25% based on the number of kids.

Not good in these times of very low interest rates.

L

BluePanther

LittleJohn,

Thanks for the reply.

Are you saying that 15%, 20% or 20% is calculated on the interest obtained from 8% of the amount in excess of 65k?

For example:
Savings = £70,000
Therefore amount over 65k = £5,000
So 8% of £5,000 = £400
Interest is 1% per annum, so 1% of £400 = £4
1 child, so 15% of £4 = 60p
Therefore additional maintenance because of £70,000 savings = 60p per year or 5p per month

If that is the case, it hardly seems worth the effort, even if interest was 10%!

BluePanther

LittleJohn,

I've done a bit more investigating and I've miss understood you

I think you mean that the CSA assume that the interest rate on the savings will be 8% and will then calculate the 15%, 20% or 30% on that amount.

So, if savings = £100,000
8% interest = £8,000 per year
1 child is 15% = £1,200 per year
Therefore, additional maintenance = £23.08 per week

To break even the savings must attract interest rate of 1.5% before basic tax = 1.2% after basic tax

:eek:

LittleJohn

My understanding is that the first 65k is deducted, ...

Savings = £70,000
Therefore amount over 65k = £5,000

Then the deemed return of 8% on the £5,000 = £750. This is seen as income.

Then 15% (for one child) on the £750 = £112pa

L

BluePanther

Ah, so it is a possibility that 65k is deducted :j

Thank you for helping to clarify this bit about savings.