Isas 2016/2017

p00hsticks

mrsp1987 wrote: »

I'm definitely not a higher rate taxpayer lol. I do see your point though. Even if I do pay tax on my 5% interest earnings, once that has been deducted I'll still probably be better off than paying no tax on 1.5%. I guess I've always just gone with the whole 'it's tax free savings' idea.

Just to reinforce/clarify what jimjames has said in post #7 above.

From April 2016, you can earn up to £1000 in non-ISA savings interest tax free.

Banks will no longer deduct tax from the interest paid, and it will be up to individuals to let HMRC know if they are receiving over that amount.

jimjames

mrsp1987 wrote: »

Having done a bit of looking around because I have nearly £30K to save I'm not going to benefit from most of these high interest rates.

I'm curious why you think that. If anything as you have £30k you can benefit from ALL the high interest rates. You may not even need to use the 123 account unless you want less hassle instead of most interest.

xylophone

Don't forget that from 6 April, there will be a £1000 tax free savings allowance for basic rate taxpayers.

http://www.moneysavingexpert.com/savings/personal-savings-allowance

The OP and spouse could use current accounts and together have 3 TSB Plus, (5%) 3 Nationwide Flex direct, (5%) 3 Lloyds Club, (4%) and four Tesco (3%).

However, it depends how valuable to them the ISA concession is or may be in the future.

https://www.gov.uk/government/publications/isas-transfer-of-benefits-to-surviving-spouse-or-civil-partner-upon-death

mrsp1987

I did forget that the new £1000 tax free savings allowance will come into effect in April, so that it something for me to bear in mind. I can't use the Santander 123 account anyway because I don't earn enough to meet the criteria for paying in £1000 per month which is why I switched to TSB instead. I just want an account where I can dump my money into it and it will generate interest over the course of the year.
My husband and I have separate current accounts where our wages get paid into and one joint account where we both pay into and where all our household bills come out of. Neither of us want to change this arrangement as I know that my salary would end up getting spent on eBay!
Another question I had was on these accounts that pay a high percent of interest on an amount up to a certain value, what gets paid on the amount above that? Is it a lower rate of interest or is no interest paid on it?

mrsp1987

Just been looking at the Santander 123 again and I've seen that it's only a minimum deposit of £500. This might be worth switching our joint account to actually...

Superscrooge

mrsp1987 wrote: »

I did forget that the new £1000 tax free savings allowance will come into effect in April, so that it something for me to bear in mind. I can't use the Santander 123 account anyway because I don't earn enough to meet the criteria for paying in £1000 per month which is why I switched to TSB instead. I just want an account where I can dump my money into it and it will generate interest over the course of the year.
My husband and I have separate current accounts where our wages get paid into and one joint account where we both pay into and where all our household bills come out of. Neither of us want to change this arrangement as I know that my salary would end up getting spent on eBay!
Another question I had was on these accounts that pay a high percent of interest on an amount up to a certain value, what gets paid on the amount above that? Is it a lower rate of interest or is no interest paid on it?

Regarding the minimum pay in requirements on the various current accounts. It doesn't have to be a 'new' £1,000 each month. You can keep shifting the same £1,000 (or whatever the minimum pay in requirements are) in and out each month.

With all the high interest current accounts. You receive the high interest on amounts up to the advertised limit. eg. With Santander if your balance was £21,000 you receive 3% interest on £20,000 and nothing on £1,000

mrsp1987

I've just been on the Santander website. If we switch our joint current account to Santander and then put £20K in it and carry on paying our bills as we currently do we could get about £670 a year. Just need to sell it to the husband and then away I go. So glad I'm in charge of the household bill.
Thanks for pointing me in this direction guys!

colsten

mrsp1987 wrote: »

Having done a bit of looking around because I have nearly £30K to save I'm not going to benefit from most of these high interest rates. Santander 123 only pays up to £20K. I'll keep looking though. I've got the time and inclination to hunt for the best deal for me.

You can get 3% AER or more on £50K just in sole current accounts. You can further boost your return by also exploiting Regular Savers.

colsten

mrsp1987 wrote: »

Just been looking at the Santander 123 again and I've seen that it's only a minimum deposit of £500. This might be worth switching our joint account to actually...

If you have £30K in current accounts, it's no problems sending some of it round them once a month to meet their minimum monthly deposits.

mrsp1987 wrote: »

I've just been on the Santander website. If we switch our joint current account to Santander and then put £20K in it and carry on paying our bills as we currently do we could get about £670 a year.

Will you get over £11 a month in cashback?

mrsp1987

colsten wrote: »

If you have £30K in current accounts, it's no problems sending some of it round them once a month to meet their minimum monthly deposits.

Will you get over £11 a month in cashback?

At the moment the majority of the money isn't in current accounts it's in either cash ISAs or my husband's S&S ISA.
Once we get the £20K into the new Santander 123 account in April (this is when my husband can get some of the capital out of the Hargreaves & Lansdown account) we'll be getting £55 per month of interest including the cash back from our bills. Until then we can put about £11-13K in the account as this is what we have free in a basic account. So yes we will be getting more than £11 a month.
The £670 figure I mentioned is after the £5 a month has been deducted as well.
I'm really glad I listened and went back to look at the Santander 123 account.