The Top Easy Access Savings Discussion Area

EthicsGradient

TiVo_Lad said:

Eirambler said:

Fairly sure taxpayers in Scotland are treated the same as the rest of the UK when it comes to savings interest.

The OP states "Basic" and "Higher" rates but Scotland has four rates of Income Tax against two in the rest of the UK (they have not referred to the Top rate in any case), and the rates are different in three out of four cases. Therefore, their calculations of implied returns do not apply to the whole of the UK.

I don't have to deal with this, but:

Scottish income tax does not apply to savings income and dividend income. This means it does not affect the amount of income tax you pay on bank or building society interest or dividends.

https://www.litrg.org.uk/tax-guides/tax-basics/what-scottish-income-tax/how-does-scottish-income-tax-work

mebu60

What_time_is_it said:

On the Virgin ISA rate change to 3.75% - does this apply to ALL of their existing easy access cash ISAs? I have one with Virgin but it is called an "Exclusive Flexi ISA2". Has been at 3% for a while now. Is this one changing too?

I hope so as that is the one that I've got. But I've not heard anything from them as yet.

Otherwise will need to open the 3.75% one on 1 June and request an internal transfer in.

RG2015

What_time_is_it said:

On the Virgin ISA rate change to 3.75% - does this apply to ALL of their existing easy access cash ISAs? I have one with Virgin but it is called an "Exclusive Flexi ISA2". Has been at 3% for a while now. Is this one changing too?

Only VM would know for sure, perhaps it is being mentioned on their Twitter page.

However the wording does imply it will apply to existing accounts. If you remove the reference to the non ISA it reads as follows.

We’re boosting our .... Cash ISA Exclusive to 3.75% AER/tax-free (variable) from 1 June 2023

Also on the same page....

• Watch your savings grow

  Get access to a 3.00% AER Easy Access Cash ISA and watch your money grow tax-free. Good news! From 1 June 2023 we will be increasing our rate to 3.75% AER/ tax-free (variable). 

Mr._H_2

What_time_is_it said:

On the Virgin ISA rate change to 3.75% - does this apply to ALL of their existing easy access cash ISAs? I have one with Virgin but it is called an "Exclusive Flexi ISA2". Has been at 3% for a while now. Is this one changing too?

I believe that is the only Virgin ISA to which this refers. Virgin keep on referring to this product in different ways, which makes it very confusing. As far as I can tell, judging from previous times that they've announced rate changes, and this product page the Easy Access Cash ISA Exclusive and Exclusive Flexi ISA2 are one and the same.

What_time_is_it

Mr._H_2 said:

What_time_is_it said:

On the Virgin ISA rate change to 3.75% - does this apply to ALL of their existing easy access cash ISAs? I have one with Virgin but it is called an "Exclusive Flexi ISA2". Has been at 3% for a while now. Is this one changing too?

I believe that is the only Virgin ISA to which this refers. Virgin keep on referring to this product in different ways, which makes it very confusing. As far as I can tell, judging from previous times that they've announced rate changes, and this product page the Easy Access Cash ISA Exclusive and Exclusive Flexi ISA2 are one and the same.

You may well be right. I hope so!

Eirambler

TiVo_Lad said:

Eirambler said:

Fairly sure taxpayers in Scotland are treated the same as the rest of the UK when it comes to savings interest.

The OP states "Basic" and "Higher" rates but Scotland has four rates of Income Tax against two in the rest of the UK (they have not referred to the Top rate in any case), and the rates are different in three out of four cases. Therefore, their calculations of implied returns do not apply to the whole of the UK.

As pointed out by someone else above, this is not applicable to savings interest.

PhilFox1985

Mr._H_2 said:

jaypers said:

RG2015 said:

Breaking news from Virgin Money.

Breaking news! We’re boosting our M Plus Saver rate to 3.03% AER3 (variable) and Easy Access Cash ISA Exclusive to 3.75% AER/tax-free (variable) from 1 June 2023. For new and existing current account customers (exclusions and terms apply).

It is the ISA that is more impressive but the non ISA account is still okay.

I have also posted on the ISA savings sub-board.

 https://forums.moneysavingexpert.com/discussion/6449558/virgin-money-exclusive-isa-increasing-from-3-to-3-75-on-1st-june/p1?new=1

https://uk.virginmoney.com/current-accounts/pca/

Still atrocious then. 

3.75% on a flexible cash ISA is very good if you are earning enough interest to breach the savings allowance. The fact it's flexible means you can operate it like an easy-access account, just paying careful attention when it's coming up to a new tax year (i.e. when April 6 is approaching, make sure you've put back everything you've taken out in the previous 12 months)

Here's what you'd need a "normal" account to pay, in order to beat this ISA, for various tax brackets (assuming, as I mentioned above, you already breach the savings allowance):

Tax Bracket	Interest Rate needed for "normal" account to beat the 3.75% flexible ISA
Basic rate	4.69
Higher rate	6.25
Basic rate with outstanding student loan	5.28
Higher rate with outstanding student loan	7.35

Why would the student loan matter?

Is it that when you do your self assessment tax return this extra income gets allowed for both in terms of income tax due, and the amount of 9% contributions required to be paid towards any outstanding student loan?

If so, this can be considered a net cost if you don't expect to pay off the loan? 

EthicsGradient

PhilFox1985 said:

Mr._H_2 said:

jaypers said:

RG2015 said:

Breaking news from Virgin Money.

Breaking news! We’re boosting our M Plus Saver rate to 3.03% AER3 (variable) and Easy Access Cash ISA Exclusive to 3.75% AER/tax-free (variable) from 1 June 2023. For new and existing current account customers (exclusions and terms apply).

It is the ISA that is more impressive but the non ISA account is still okay.

I have also posted on the ISA savings sub-board.

 https://forums.moneysavingexpert.com/discussion/6449558/virgin-money-exclusive-isa-increasing-from-3-to-3-75-on-1st-june/p1?new=1

https://uk.virginmoney.com/current-accounts/pca/

Still atrocious then. 

3.75% on a flexible cash ISA is very good if you are earning enough interest to breach the savings allowance. The fact it's flexible means you can operate it like an easy-access account, just paying careful attention when it's coming up to a new tax year (i.e. when April 6 is approaching, make sure you've put back everything you've taken out in the previous 12 months)

Here's what you'd need a "normal" account to pay, in order to beat this ISA, for various tax brackets (assuming, as I mentioned above, you already breach the savings allowance):

Tax Bracket	Interest Rate needed for "normal" account to beat the 3.75% flexible ISA
Basic rate	4.69
Higher rate	6.25
Basic rate with outstanding student loan	5.28
Higher rate with outstanding student loan	7.35

Why would the student loan matter?

Is it that when you do your self assessment tax return this extra income gets allowed for both in terms of income tax due, and the amount of 9% contributions required to be paid towards any outstanding student loan?

If so, this can be considered a net cost if you don't expect to pay off the loan? 

As far as I can tell, someone with a student loan has to be doing self-assessment, and have over £2,000 of unearned income (which includes profits from letting out a property, as well as savings interest, and, I suspect, dividend income, though that's not listed here) before it's subject to the 9% additional tax rate - though as soon as the limit is exceeded, the whole lot can be taxable, giving you a sudden increase in tax payable - see I have to fill in a tax return. How do Self Assessment Plan 1 student loan repayments work? | Low Incomes Tax Reform Group (litrg.org.uk) I have to fill in a tax return. How do Self Assessment Plan 2 student loan repayments work? | Low Incomes Tax Reform Group (litrg.org.uk) CSLM16035 - SL repayments: calculation of loan repayments: unearned income - HMRC internal manual - GOV.UK (www.gov.uk)

It seems, from those links, that if you don't have to do self-assessment, your unearned income won't be subject to the student loan tax, even if above £2,000 - odd.

worriednoob

Apologies, I'm not sure if it's the right place to post on here, so it's incorrect, I'm more than happy for mods to move this post.  So just to be clear, this question is not for me.  It's for one of my best friends and their partner.  They are not very tech savvy, so they've asked me to help them. 

So my friend used to work in a full-time job earning good salary.  However around 2 months ago, due to work accident/injury, he quit his full-time job and has gone to a zero-hours contract where he only earns around £5-6k per annum + disability benefits .  But he has also built around £45k in savings due to his previous job salary.  His wife on the other hand is in full-time work and earns around £23k per annum and has saved around £10k.  Other than what's already mentioned, They have no other financial income sources.

What he wants to know is if he were to put the £45k money in savings account, what are the tax implications?  i.e. how much interest would he be allowed to accrue before he would be hit with tax?

Furthermore, does being married mean that any savings built by both himself and his wife would be counted as one or does each individual have their own allowances? i.e, can his wife build a seperate pot of savings because she is allowed her own amount of interest?  If so, how do we calculate how much such allowances are?

Thanks in advance for any help or advice you can give.

EthicsGradient

worriednoob said:

Apologies, I'm not sure if it's the right place to post on here, so it's incorrect, I'm more than happy for mods to move this post.  So just to be clear, this question is not for me.  It's for one of my best friends and their partner.  They are not very tech savvy, so they've asked me to help them. 

So my friend used to work in a full-time job earning good salary.  However around 2 months ago, due to work accident/injury, he quit his full-time job and has gone to a zero-hours contract where he only earns around £5-6k per annum + disability benefits .  But he has also built around £45k in savings due to his previous job salary.  His wife on the other hand is in full-time work and earns around £23k per annum and has saved around £10k.  Other than what's already mentioned, They have no other financial income sources.

What he wants to know is if he were to put the £45k money in savings account, what are the tax implications?  i.e. how much interest would he be allowed to accrue before he would be hit with tax?

Furthermore, does being married mean that any savings built by both himself and his wife would be counted as one or does each individual have their own allowances? i.e, can his wife build a seperate pot of savings because she is allowed her own amount of interest?  If so, how do we calculate how much such allowances are?

Thanks in advance for any help or advice you can give.

I suspect this could depend on what the disability benefits are, and how they're taxed - you may find answers from people familiar with the system in the Benefits & tax credits — MoneySavingExpert Forum . I would guess that the combined amount of benefits and £6k is still less than his wife's salary, in which case it's probably a good idea to have the £45k in his name even if the benefits are taxable. When it's know how much, if any, of his benefits are taxable, we could look at if any of the savings might attract tax - which could be avoided anyway by putting them in a cash ISA.