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

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  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
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    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?
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • eskbanker
    eskbanker Posts: 31,860 Forumite
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    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
    bigadaj Posts: 11,531 Forumite
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    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
    polymaff Posts: 3,910 Forumite
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    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
    eskbanker Posts: 31,860 Forumite
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    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
    polymaff Posts: 3,910 Forumite
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    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
    eskbanker Posts: 31,860 Forumite
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    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!
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