Nationwide Start To Save Account

zagfles

Anyone know the tax status is of any winnings from this account? Nationwide as usual are no help on this, I can't find anything on it on their website. Tax free like premium bonds, lottery etc, taxable as interest, or "annual payment" like some reward accounts?

Shedman

I would say it isn't Other Income /Annual Payment as there is no contractual right to it as would be case with,say, where you are paid £50 for referring a friend, a reward such as Halifax rewards where you are guaranteed an amount if you fulfill certain conditions or otherwise where you were contractually entitled to commission or the like.  

Can't see it being interest as there is no direct relationship to the amount you hold and the amount paid.

So, as it appears to be effectively a game of chance with your £50-100 a month being the entry fee, I would say it would be tax free in same way as other winnings like premium bonds, the lottery or a bet.

zagfles

Shedman said:

I would say it isn't Other Income /Annual Payment as there is no contractual right to it as would be case with,say, where you are paid £50 for referring a friend, a reward such as Halifax rewards where you are guaranteed an amount if you fulfill certain conditions or otherwise where you were contractually entitled to commission or the like.  

Can't see it being interest as there is no direct relationship to the amount you hold and the amount paid.

So, as it appears to be effectively a game of chance with your £50-100 a month being the entry fee, I would say it would be tax free in same way as other winnings like premium bonds, the lottery or a bet.

Yes, probably right although it's not like the lottery or a bet in that they require a stake, effectively Nationwide are giving you the stake. The £50-100 you put in isn't the stake as it remains yours. So it's a definite grey area. It is the same principle as premium bonds although I think premium bonds are specifically legislated to be tax free.

Banks and building societies should be spelling out the tax status of all these weird schemes they set up to pay the investors that aren't "interest". Instead they either say nothing or just some some vague "ask HMRC" statement. They should be asking HMRC when they set them up, and then telling investor they are tax free, or they are taxable as interest/annual payment etc.

deejaybee

Anyone know if Nationwide will be extending this account past April 21 ?

colsten

deejaybee said:

Anyone know if Nationwide will be extending this account past April 21 ?

They have already done so. 

Oasis1

I had no idea this account had been around for this long! Signed up this month for a punt (and 1% interest is alright!)

quirkydeptless

Your savings habit has made you a winner

Dear Quirky,

Congratulations! You’re one of our 2,066 prize draw winners! This means your Start to Save balance is about to grow by £100, and your savings habit is clearly paying off.

YellowStarling

2 possible things Moneybear (if not an error like you suggest):

1) Did you withdraw any money at all?  I.e. the account balance needs to increase by £50-£100 each month for three consecutive months prior to the month of the draw.  So if you withdrew any money, your payments in might not have increased the balance by at least £50 in one or more months.

2) If (1) does not apply, then when did you open the account?  From their T&C, I think you would have needed to have opened the account in Jan at the latest (and then paid your £50 in Jan, £54 in Feb and £100 in Mar) - if the third of your payments above was paid in this month (Apr), then you will not be eligible for today's draw.  To this end, to be in the 21 Jul draw, you will need to increase your account balance by £50-£100 this month, again in May and again in Jun.

MDMD

Moneybear said:

I've received an email today telling me that I was not eligible for today's draw. However my last 3 payments were £50, £54 and £100 so this email appears to have been in error. 
Fingers crossed they can explain what has happened. I'm sure £100 exactly can be paid in? 

Did you withdraw any? The rules say that your balance has to increase by between £50 and £100 for each of the three months.

So if you take any out you have to pay it back in that month.

YellowStarling

Moneybear said:

MDMD said:

Moneybear said:

I've received an email today telling me that I was not eligible for today's draw. However my last 3 payments were £50, £54 and £100 so this email appears to have been in error. 
Fingers crossed they can explain what has happened. I'm sure £100 exactly can be paid in? 

Did you withdraw any? The rules say that your balance has to increase by between £50 and £100 for each of the three months.

So if you take any out you have to pay it back in that month.

I took out £4 so my balance still increased by £50 that month. This is within the rules and examples on the website. I have spoken to Nationwide and they can't see why I was excluded so need to investigate further. 

Yes, that sounds as though it does pass the balance increase test for three consecutive months.  Not sure if you saw my post above MDMD's as we commented at similar times, but I also wondered as to when the three net increases of £50, £50 (£54 - £4) and £100 you mention actually occurred - were they Jan-Mar or Feb-Apr?  If Jan-Mar, then I agree I can see no reason why you wouldn't have been in the draw. 

If Feb-Apr, then I think your Apr payment (even if before today) will actually be the first towards Jul's draw, leaving you with just Feb and Mar (2/3 months) towards today's draw, which may explain why you weren't in Apr's draw.  But Nationwide staff should be able to confirm (not sure if they expect you to investigate further, or they will go away to investigate further).