The Top Easy Access Savings Discussion Area

youth_leader

When my husband died in 2016 I received a lump sum which I've invested for my future care. With the current interest rate increases I think I might go over the £1000 limit and be taxed.  

Can I ask your advice on managing this please?  

murphydavid

youth_leader said:

When my husband died in 2016 I received a lump sum which I've invested for my future care. With the current interest rate increases I think I might go over the £1000 limit and be taxed.  

Can I ask your advice on managing this please?  

A savings ISA is tax free and not part of the £1000 limit. Need to do the math to make sure it would be advantageous. Your phrasing seems to suggest that it is invested in a particular savings account. If so make sure you move it around to get best rates. Safety would suggest you don't put more than 85,000 in one institution.

polymaff

youth_leader said:

When my husband died in 2016 I received a lump sum which I've invested for my future care. With the current interest rate increases I think I might go over the £1000 limit and be taxed.  

Can I ask your advice on managing this please? 

Without details of your other income, your question can't be fully answered.  What, and how much are your other incomes?

Look on the bright side.  If increased interest rates give you more, but more taxed, income, you are still winning...;)

youth_leader

Thank you for replying.  I do have funds invested in a savings ISA.

I have a pension from my husband's company of £18K, and a £5K Teacher's pension.  My husband's company didn't tax me correctly in 2016 and I owed HMRC £3K, which I paid back over three years.  HMRC over estimated my savings interest and I had to contact them each tax year to sort it out, this is the first year I have a 125 tax code.  I'm 65 and get my pension next April, I realise I will be taxed on it. 

I have my 'care' funds in Marcus and the bonus rate has just gone up, thank you polymaff, I'll just see what happens.

polymaff

youth_leader said:

Thank you for replying.  I do have funds invested in a savings ISA.

I have a pension from my husband's company of £18K, and a £5K Teacher's pension.  My husband's company didn't tax me correctly in 2016 and I owed HMRC £3K, which I paid back over three years.  HMRC over estimated my savings interest and I had to contact them each tax year to sort it out, this is the first year I have a 125 tax code.  I'm 65 and get my pension next April, I realise I will be taxed on it. 

I have my 'care' funds in Marcus and the bonus rate has just gone up, thank you polymaff, I'll just see what happens.

Oh well, you are already into tax-paying with the two occupational pensions and your State Pension will add even more tax to pay - but it won't total anywhere near higher rate (40%) territory so you'll have the £1,000 allowance for your savings - providing that your interest doesn't push your total taxable income above £50,000.

Unless your ISA is offering a very good rate (very unusual these days) then a cash ISA is not a good deal for a basic rate taxpayer. As a basic rate taxpayer you'd need at least a 1.04% ISA interest rate to beat the latest Marcus Online Saver account.  BTW you won't get the new rate rise from Marcus automatically.  You need to log into the account(s) and select a review and then select to upgrade the bonus rate. (I think that that's what I did earlier this morning; anyone with a better short-term memory correct me, please).

youth_leader

Thank you polymaff.    I have an IFA handling the ISA and investment with Aviva. It was doing well but my six month review was a loss.  My late husband did all of our household finances, I am not number literate at all.  Many thanks for your advice.

Expotter

polymaff said:

youth_leader said:

Thank you for replying.  I do have funds invested in a savings ISA.

I have a pension from my husband's company of £18K, and a £5K Teacher's pension.  My husband's company didn't tax me correctly in 2016 and I owed HMRC £3K, which I paid back over three years.  HMRC over estimated my savings interest and I had to contact them each tax year to sort it out, this is the first year I have a 125 tax code.  I'm 65 and get my pension next April, I realise I will be taxed on it. 

I have my 'care' funds in Marcus and the bonus rate has just gone up, thank you polymaff, I'll just see what happens.

Oh well, you are already into tax-paying with the two occupational pensions and your State Pension will add even more tax to pay - but it won't total anywhere near higher rate (40%) territory so you'll have the £1,000 allowance for your savings - providing that your interest doesn't push your total taxable income above £50,000.

Unless your ISA is offering a very good rate (very unusual these days) then a cash ISA is not a good deal for a basic rate taxpayer. As a basic rate taxpayer you'd need at least a 1.04% ISA interest rate to beat the latest Marcus Online Saver account.  BTW you won't get the new rate rise from Marcus automatically.  You need to log into the account(s) and select a review and then select to upgrade the bonus rate. (I think that that's what I did earlier this morning; anyone with a better short-term memory correct me, please).

With regards to cash ISAs you need to look at the current top picks tables. Rates are creeping up, at the moment Cynergy and Marcus are paying the same rate for their cash ISA or their instant access (1.31 and 1.3% respectively, but only Cynergy accepts transfers). So not as good as Virgin or Chase, but you don't need to open new current accounts or worry about the £1000 interest limit for tax. There does seem to be more of a difference in rate for fixed deals though.

financialbliss

So, saw the Rasin platform 1.52% rate on Savings Champion yesterday - not seen it mentioned here yet?

https://savingschampion.co.uk/best-buys/personal/easy-access-accounts
https://www.raisin.co.uk/term-deposit/ubl-uk-easy-access-account/?#bank-product-details

By my reconing, that puts Chase down to third place - sorry soulsaver.

wiseonesomeofthetime

UBL UK - via Raisin

"The minimum amount you can deposit is £1,000"

"There is no limit to the amount of withdrawals you can make; however, you are unable to withdraw less than £500 in a single withdrawal transaction and a withdrawal will not be authorised if it leaves your balance below £1,000."

Beats Chase on rate, yes, however, those extra stipulations would not be worth the extra 0.02%, for me.

soulsaver

financialbliss said:

So, saw the Rasin platform 1.52% rate on Savings Champion yesterday - not seen it mentioned here yet?

https://savingschampion.co.uk/best-buys/personal/easy-access-accounts
https://www.raisin.co.uk/term-deposit/ubl-uk-easy-access-account/?#bank-product-details

By my reconing, that puts Chase down to third place - sorry soulsaver.

Good it is 'on topic'... 

No need to apologise,& I'll consider including it in the next bulletin.

I have to admit to having some reservations as funds pass through the 3rd party and AFAIK for an undefined time aren't FSCS protected? It's the reason I don't use Raisin.