National Savings - change of interest date

hestonlad

Just received my letter telling me that NS&I have decided to change the date on which they will pay interest from April 6th to April 1st.

So that this year two lots of interest will come in the same tax year.

And presumably none next year !

Seems wierd and potentially distressing !

alanq

Which products are affected?

hestonlad

NS&I Direct Saver

"This is to let you know that we have changed the date that interest is credited to your Direct Saver account each year. We previously credited the interest on 6 April but from next year onwards we will credit it on 1 April.

On 15 September 2010 we updated the Direct Saver terms and conditions to reflect this change........."

Mikeyorks

Seems an odd thing for an 'Executive Agency of the Exchequer' to do - in moving from a long held tax year boundary?

Some bright spark in Treasury trying to diminish the credit side of the NS&I accounts this year? Perhaps the inflow of indexed linked funds was greater than realised before they put the blocks on?

alanq

It may affect more than tax. By artificially increasing a person's income for one year it could affect benefits of various kinds.

I remember that there was a fund that brought forward its payment date so that better off investors could avoid paying 50% tax on dividends. Other less well off investors were disadvantaged by the move. There was uproar.

I suppose all that NS&I customers can do is to withdraw their funds taking the last 6 months' interest and deposit it somewhere else that won't pay interest until next tax year on the next 6 months' interest.

oldvicar

hestonlad wrote: »

NS&I Direct Saver

"This is to let you know that we have changed the date that interest is credited to your Direct Saver account each year. We previously credited the interest on 6 April but from next year onwards we will credit it on 1 April.

On 15 September 2010 we updated the Direct Saver terms and conditions to reflect this change........."

Nothing sinister is happening. Just that this year Easter Bank Holiday Monday (5 April) seemed to take them by surprise. The original T&Cs were to pay interest on 5th April (last day of the tax year) but by accident it slipped to 6th April (start of new tax year). They wrote to everyone affected in April/May. Fortunately, with the account only being available for a few weeks the impact on most taxpayers will be limited.

I regard this change as simply being to ensure that interest is in future always paid near the end of the tax year, as seems was alwaysthe intention, regardless of how weekends and bank holidays fall.