MSE News: Santander 123 rate to be slashed to 1.5%

gadgetmind

bigadaj wrote: »

Money thing, Ablrate, Savingstream though the latter has lost some support.

Several others as well, have a read on the p2p independent forum.

And what level of capital protection is there?

eskbanker

polymaff wrote: »

True - for a non-tax-payer. 1.336% gross for a basic rate tax-payer.

Well yes, tax would reduce returns once beyond PSA, but not sure I follow how you get to 1.336% given what we don't know about the scenario painted (the £60K is shared between a taxpayer and a non-taxpayer, and they have an unspecified amount in other taxable accounts) - what assumptions are you making?

bigadaj

gadgetmind wrote: »

And what level of capital protection is there?

There's security and a reasonable degree of due diligence.

My response was to a suggestion to use rate setter, these aren't alternatives to an fscs protected savings account, but to me appear a lot better than the default suggestions of Zopa and rate setter.

Dyor as ever.

polymaff

eskbanker wrote: »

Well yes, tax would reduce returns once beyond PSA, but not sure I follow how you get to 1.336% given what we don't know about the scenario painted (the £60K is shared between a taxpayer and a non-taxpayer, and they have an unspecified amount in other taxable accounts) - what assumptions are you making?

a) taking the £74 off the nett interest,

b)that they will be taxed at basic rate on the interest.

eskbanker

polymaff wrote: »

a) taking the £74 off the nett interest,

b)that they will be taxed at basic rate on the interest.

In which case, surely the £894 gross interest would become £715.20 net, less the £74 = £641.20, i.e. 1.069% of £60K rather than 1.336%?

As I see it, PSA actually makes all of this largely a moot point anyway, in that for those who only receive interest below the £500/1000 allowance it's all gross but for those who get more then the tax is payable on the overall surplus income, rather than being arbitrarily attributable to a specific savings account as a percentage adjustment, which is why I didn't introduce tax into the original calculation!

polymaff

eskbanker wrote: »

In which case, surely the £894 gross interest would become £715.20 net, less the £74 = £641.20, i.e. 1.069% of £60K rather than 1.336%?

No, because having switched from Gross to Nett before subtracting the £74 you have to convert back from Nett to Gross in order to make a valid comparison with your original computation - and, sure enough, your, above, 1.069 divided by 0.8 is . . . .

eskbanker

polymaff wrote: »

No, because having switched from Gross to Nett before subtracting the £74 you have to convert back from Nett to Gross in order to make a valid comparison with your original computation - and, sure enough, your, above, 1.069 divided by 0.8 is . . . .

Ah right, I see where you're coming from now, I hadn't picked up on the re-grossing that you're doing, although as above am unconvinced that either netting or regrossing is particularly relevant anymore, given the number of variables now involved in any such computations!