The Top Easy Access Savings Discussion Area

kaMelo

worriednoob said:

EthicsGradient said:

worriednoob said:

EthicsGradient said:

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.

Thanks for your quick reply EthicsGradient.  He gets PIP (middle-rate) and his wife gets Carers Allowance.  Other than that, they have no other benefits.  I was under the assumption that savings don't affect pip or carers allowance?

I was thinking more of whether the benefit payments are used in calculating their income and then their income tax, rather than whether savings affect the benefits they get. 

Income Tax: introduction: Tax-free and taxable state benefits - GOV.UK (www.gov.uk) says his wife's Carer's Allowance is taxable, while PIP is not. In which case, he can receive a load of interest (at least £6k before he uses the remainder of his Personal Allowance, and then he can get another £6k at 0% from the starting rate of 0% on savings for low earners, and the Personal Savings Allowance) before he has to start worrying about paying tax on it - and £45k will only £2,700, even if interest rates went up to 6%. His wife, however, can only get the basic rate taxpayer's £1000 in interest before she'd have to start paying tax on it, so they should make sure the £45k is only in his name. They can also use the Marriage Allowance to transfer £1,260 of his Personal Allowance to her - which will save £252 on her tax bill.

Thanks so much for breaking this down for me.  Yes that totally makes sense, although I've checked a few sites and they say that the carer's savings amounts don't affect entitlement to carers allowance.

Savings don't affect carers allowance but earnings do. The earnings threshold is not tapered, it's cliff edge at £139 per week, earn less than that and you qualify, earn more than £139 and you lose it all.

Her earnings of £23,000 per year are well in excess of the threshold so she doesn't qualify for carers allowance and she will need to report that to stop any more payments.. Any money she has received for carers allowance when her earnings exceed the weekly threshold are an overpayment and will need to be repaid. 

Section62

cheesemason said:

Ford Money increasing to 3.75% on 1st June

Emails arriving from Ford Money confirming this, effective today.

worriednoob

Thanks @housebuyer143 and @kaMelo for alerting me to this.  Yes, your absolutely right that she shouldn't be getting Carers Allowance.  I have made them aware of this and she plans to contact the benefits office immediately.  Although it's unintentional as she may not have been aware of it, I explained that she will most likely need to pay the CA back, which she's happy to do so.

The main thing I have learnt is that due to the husband's small amount of earnings, his pip isn't affected and he is save to earn upto around £6k in interest, hence he can continue to build a lot of savings before being taxed.  I've also learnt that his wife has a seperate, albeit smaller allowance of around £1k interest before being taxed.  If I've got any of this wrong, I'd greatly appreciate it if someone could correct me.

Thanks again for all your help.

jaypers

Investec Easy Access Saver now 3.82% 

pearl123

jaypers said:

Investec Easy Access Saver now 3.82% 

On balances over £5000. 

Vectra

i use chase bank savers acct 3.3% easy to use any problems any body know of

jaypers

Vectra said:

i use chase bank savers acct 3.3% easy to use any problems any body know of

No problems at all. Chase platform seems very good and stable now. Only issue with their savings account now is that 3.3% isn’t good enough at all. I would move savings elsewhere.

mebu60

Section62 said:

cheesemason said:

Ford Money increasing to 3.75% on 1st June

Emails arriving from Ford Money confirming this, effective today.

As someone said recently, receipts in to Ford Money are very quick now. My HSBC OBS funds whizzed into Ford earlier this morning (via three current accounts!).

soulsaver

Section62 said:

cheesemason said:

Ford Money increasing to 3.75% on 1st June

Emails arriving from Ford Money confirming this, effective today.

On their wbby now.. Flexible Savings Account - Easy access savings | Ford Money

oz0707

mebu60 said:

Section62 said:

cheesemason said:

Ford Money increasing to 3.75% on 1st June

Emails arriving from Ford Money confirming this, effective today.

As someone said recently, receipts in to Ford Money are very quick now. My HSBC OBS funds whizzed into Ford earlier this morning (via three current accounts!).

might shift my obs funds into Ford. At least they seem to want to keep up with competitive rates.

Is now a good time to move HSBC OBS funds due to the monthly interest or does it go on account opening anniversary?