HM Treasury The Saving Gateway - £400 for Free!

isasmurf

Milarky wrote:

But what I'd like to know [if you can point me out] is what rate of interest is on offer - as I assume that Halifax isn't going to get the money for nothing are they?

No interest is paid on the accounts, the government contribution is supposed to cover any interest payments.

Paul_Varjak

When you open these accounts it seems that Halifax actually open up a 'Liquid Gold' account - at least I have been an account book for a Liquid Gold account.

The goverment website does say that when the 18 month period is up, the account closes and money is transferred to a Liquid Gold account, but as it is in a Liquid Gold account from the outset, I wonder if Halifax will pay interest on it as well?

iris

It seems to be a post code lottery to me, with Manchester being the winners and Cambridgeshire being the losers. I would have more incentive to save £400 and get it doubled, than £2000 and only get £400 added after 18 months. Human nature being as it is, I would have thought that not much research is needed to come to the conclusion that getting £400 for saving £400 would have the better take up.

I have an appointment on Wednesday to open my account, so I'll let you know how I get on.

Milarky

It looks from what Paul has said that there won't be any interest paid on this account - that's what the leaflet describing the first pilot scheme says, anyway.

If you have a choice, therefore, and take this up you should aim to pay your money in at the end of each month rather than the beginning.

Here's a formula to allow you to work out the estimated return:

R = ((1 + (256/120) x (uplift/principal) ^ (3/4)) - 1) * 100%

eg (( 1 + (256/120) x (£400/£2,000) ^ (3/4)) - 1) * 100% = 30.53% pa

i.e. You get back 20% more than you paid in after 16 months, but the average 16 month's balance is only '120/256ths' of the total, thus the return is greater than 20% over this period. To 'annualise' you take this to the 12/16ths (or 3/4ths) power. The '120' comes from '15 + 14 + .. ..+ 2 + 1' = 120 if paying at the end of month. From the begining of the month this would be '16 + 15 + .. ..+2 + ' = 136. Going 'mid month' you split the difference and you get '128' instead. '128/256' is exactly one half - representing an average balance of exactly 50% of the total amount [the principal]

Paul_Varjak

iris wrote:

It seems to be a post code lottery to me, with Manchester being the winners and Cambridgeshire being the losers

Acutally, the losers are those people who would qualify but are not invited even though they live within one of the catchment areas, plus all those people who don't live in any of the catchement areas!

Paul_Varjak

Milarky:

Good gracious milarky, you are getting as bad as grumbler!

Milarky

Paul_Varjak wrote:

Milarky:

Good gracious milarky, you are getting as bad as grumbler!

I'm trying, but he's much better at it than me!

Paul_Varjak

Just checked my Saving Gateway account online. As indicated previously, it is a Liquid Gold account, but it is showing as 0% interest, so you only get the government top-up and not interest from Halifax as well.

Tamster_2

I put a thread out asking if this thing was for real, cos it seemed too good to be true. I too was contacted, and was a bit worried as to the legitimacy of the scheme (scam?). I thank you for letting me know that it is for real, and shall put as much cash as I can into an account as soon as I get the paperwork!!!

Mumstheword

I got my invite today.
I say MY, because I have decided that, although it is addressed to no-one in particular, just the address, it MUST be for me;)

Actually, I'm the only one in the house who qualifies, because I just do some occasional part time work from home, so don't earn very much.
Up to now, the thread seems to suggest that the invitees have been targeted, possibly for their being eligible for certain benefits, or the area they live. I thought I'd give you very breif details to counter these, and tell you that my invite wasn't specifically to any one person, none of us claim the listed benefits, and the area we live is quite affluent (despite me living here!!).
But anyway, I certainly can't afford to look a gift horse in the mouth and will be applying by post (thanks Paul, for the advice, I'll make sure to point out that the blurb says applications by post are okay).

And guess where I live? Yeah, Manchester!! (sorry, but it's so rare that we get the good side of deals that I need to milk it for a minute!)

I searched the forums for info on this, as I , too, wondered how legit it was. Thanks for the posts, this was a very useful thread for me.