Reaching £1000 taxable interest for the year

schiff

There will be a fair number on here who have reached, or soon will reach, the point of having been credited with over £1000 interest in the tax year from regular savers and the interest paying current accounts.

Which makes the interest on a 2.25% regular saver (Leek United for instance) 1.8% and even on a 2.5% regular saver, which seems to be a common rate of interest now on most of them, it's only 2% net.

There's a fair amount of work involved in monitoring etc these accounts and many on here will have lots of them. Is anybody wondering whether it's really worth it, even for the 2% net accounts?
Doesn't it require an obsessive drive to extract every penny?

badger09

schiff wrote: »

There will be a fair number on here who have reached, or soon will reach, the point of having been credited with over £1000 interest in the tax year from regular savers and the interest paying current accounts.

Which makes the interest on a 2.25% regular saver (Leek United for instance) 1.8% and even on a 2.5% regular saver, which seems to be a common rate of interest now on most of them, it's only 2% net.

There's a fair amount of work involved in monitoring etc these accounts and many on here will have lots of them. Is anybody wondering whether it's really worth it, even for the 2% net accounts?
Doesn't it require an obsessive drive to extract every penny?

Yes

I've just posted this in the Santander 123 v lite thread

https://forums.moneysavingexpert.com/showpost.php?p=74872934&postcount=24

ColdIron

My regular savers are completely automated and require next to no monitoring, most of them are funded on the first of the month which helps. I'm fortunate to be able to use the starting rate for savings so there is no tax implication for me but I'd still rather earn £1,100 and pay a small amount of tax than earn £1,000, particularly given the minimal effort required. If it was more onerous perhaps I would see it differently but for now I'm sticking with them. I won't get out of bed for less than 2.25% though

talexuser

I'm already over the 1k because a Paragon 1 year fix ended this tax year. Swapped 2 Santanders to Lites because the cashback just covers the fees and use them to rotate DDs. Closed down 2 BoS because don't have enough DDs even with 3 cashback credit cards. Looking at the two TSBs I wonder if it is worth it for £6 a month. But that is £144 a year credit and £115 a year after tax for doing nothing. If TSB drop the rate significantly after the IT debacle has faded from peoples' memory then probably will drop them too.

soulsaver

I keep laddering my stash up the interest rate scale -I have 'float' earning nothing.. and I still have Santander hub earning effective 1.2% so I take whatever RSs come easily available... shifting hub funds out and float in.

I'm still trying to decide whether the certified opening requirements on at 2% Scottish BS RS is a step too far ..

I'll be going over the PSA this year. I'm not sure how efficient HMRC will be at collection - my personal account makes no sense to me ATM.

gingercordial

Personally I enjoy the (limited) maintenance this requires as a kind of hobby, but it has driven me towards more consideration of where the cash should go. I used to just have everything in my name by default but now lean towards opening accounts in my husband's name to access his allowance too. Similarly ISAs may become more interesting again.

veryintrigued

If you fall below the basic personal tax threshold on income then you can enjoy a little more than 1k

:-)

schiff

A propos of my initial post, an additional irony is that a portion of my taxable interest is interest on my Santander and Bank of Scotland accounts, effectively 1.2%

Terry_Towelling

Presumably, OP, your salary is over £16850 and you are unable to take advantage of any of the £5K starting rate for savings interest?

I also feel it is important to heed what Coldiron has said - it is still better to get some interest than none at all. After all, you wouldn't tell your employer to pay you a bit less so that your PAYE tax bill would be less, would you.

I do take the point about the effort involved. For most of us, things are handled by STO and the only effort involved is finding the deal in the first place and setting up the STO. You might also want to consider having interest paid monthly (where possible) as this may allow you to spread the interest income out across multiple tax years - doesn't always make a difference but it can do.

schiff

gingercordial wrote: »

Personally I enjoy the (limited) maintenance this requires as a kind of hobby.

I find that too. Silas Marner counting his gold coins!

schiff

Terry_Towelling wrote: »

Presumably, OP, your salary is over £16850 and you are unable to take advantage of any of the £5K starting rate for savings interest? (1)

I also feel it is important to heed what Coldiron has said - it is still better to get some interest than none at all. (2)

I do take the point about the effort involved. For most of us, things are handled by STO and the only effort involved is finding the deal in the first place and setting up the STO. You might also want to consider having interest paid monthly (where possible) as this may allow you to spread the interest income out across multiple tax years - doesn't always make a difference but it can do. (3)

(1) Correct
(2) I agree
(3) All my interest is paid monthly except the maturing Regular Savers and there are too many of those to make it feasible to arrange dates that could save tax.