Savings Interest Rate

JBmoney

Probably the dumbest question EVER posted here but.. is the interest rate on savings 20% or 22%.
I somehow always believed it was in line with income tax but have reason to possibly doubt this assumption.

chesky369

Savings rate is generally 20% but I was wondering myself whether this will change now that the income tax rate has been reduced.

lisyloo

It's 20% for savings (but 22% for income)
so you are absolutely right.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnSavingsAndInvestments/DG_4015739

lisyloo

BTW - that's how it was before the budget.
It's possible that it has changed.

bristolleedsfan

chesky369 wrote: »

Savings rate is generally 20% but I was wondering myself whether this will change now that the income tax rate has been reduced.

reduction is basic savings tax rate wasnt announced so wont be getting reduced increase in isa cash allowance from april 2008 was announced about 600.00 xtra from memory ....

Chrismaths

it hasn't changed. from 2008 there will be 2 rates of basic rate tax - 10% for dividends, 20% for everything else.

steady__eddie

In the interests of "REFORM", I am surprised that the 10% rate on dividends wasn't replaced by a 20% rate

Chrismaths

It used to be 20%, which you could reclaim in a PEP/ISA or pension. Gordo himself reduced that to 10% (which was NOT a tax cut, but a tax rise, as you could only reclaim 10%, if you were a BR taxpayer, you had no further liability anyway), then made them non reclaimable in 2004 (announced '99).

Jake'sGran

The first line of the first post has me completely flummoxed "is the interest rate on savings.... ". Is this a reference to the tax rate on savings interest after a person has hit their total allowances?

Stompa

This:

http://boards.fool.co.uk/Message.asp?mid=10463751&sort=whole

may be of interest.