Santander 123 account fee increasing to £5 from January

VT82

My sole 123 account has £20k in there (and I get about 70p cashback a month - whoop whoop!), so it's staying.


I pestered my OH into opening a joint 123 account with me for our bills. Although I couldn't quite go so far as to get him to use it as our joint savings account too :undecided It only has about £1.5k in it so hardly gets any interest, and we should be getting about £2.50 per month cashback once all our DDs are going out. Dammit this one needs switching :mad:

Archi_Bald

VT82 wrote: »

Dammit this one needs switching :mad:

Should easily pay you £200 to switch it.

FenFatale

olip74 wrote: »

A point worth making for those doing the sums. It has been mentioned that new tax rules on interest earnings mean interest will effectively become tax free for most people from April '16.

With a 123 account, the level at which you would be no worse off than you are now under these new rules is ~£6k or to be more precise...

£6081 * 2.96% * 20% = £36 that HMRC would have taken.

The tax changes due in April 2016 will have no benefit for non-taxpayers.

Yorkshire_Pud

Also anyone receiving over £1,000 a year from savings interest that is 'taxable' will presumably have to fill in a tax return and/or notify certain banks to pay interest with tax taken off or tell all the banks to pay interest with tax taken off and claim back the tax on the first £1,000.

As usual the simpler the government, any government, try's to make things the more complicated it all becomes. Not that they can tell us how its all going to work yet because they don't know yet either.

BobQ

Yorkshire_Pud wrote: »

Also anyone receiving over £1,000 a year from savings interest that is 'taxable' will presumably have to fill in a tax return and/or notify certain banks to pay interest with tax taken off or tell all the banks to pay interest with tax taken off and claim back the tax on the first £1,000.

As usual the simpler the government, any government, try's to make things the more complicated it all becomes. Not that they can tell us how its all going to work yet because they don't know yet either.

As they do at present for sums above £0K you mean?

veryintrigued

Pincher wrote: »

So you only pay your plumber when you have your periods?

Childish I know but this did make me smile!

Yorkshire_Pud

BobQ wrote: »

As they do at present for sums above £0K you mean?

No I don't mean that and I don't fill in a tax return, yet.

Kim_13

I think the majority will have tax free savings. It would be near £40,000 needed to get over £1,000 in interest at 2.96 AER. Many don't have that much money and/or have a lot in non-interest paying accounts.

I wonder if account fees could be offset against any tax payable though. 2 full Santander 123's at the current rate would be slightly over, but if that meant that the £120 in fees could be claimed back, there would be in effect hardly any tax.

I doubt they know how it'll work and they probably needed the year in advance to think it up. Funny how they could axe NI for under 21's with immediate effect. I wouldn't be surprised if some goal posts were moved.

daveyjp

1% cashback on Santander mortgage payments may still make it valuable to some customers.

colsten

Kim_13 wrote: »

I wonder if account fees could be offset against any tax payable though.

Someone else wondered that too: https://forums.moneysavingexpert.com/discussion/5324654