Am I mistaken about Interest Rate %'s on Virgin Money M Plus Account

k_man

Molly4 said:

Thank you Band7 and RG2015 for your help in your last two posts. Also thank you to everyone who has helped me find ways of increasing the amount of Interest I can get on my savings. 

My original post was because I had misunderstood the frequency of being paid the 2.00% Interest. I incorrectly thought I would get 2.00% per month when in fact I shall be getting 2.00% for the whole year. 

Apologies if I appeared to be pushing the point earlier.
I had thought there were two areas of misunderstanding:

How the interest was calculated, which was clarified earlier in the thread.
What the rate on the Saver account was in February.

Good to know all is clear now 👍

k_man

Another thought, make sure you keep the MPlus Account (current) as close to £1000 as you can, until the anniversary of the account, to get the most of the 3% bonus interest.

MovingForwards

One other thing, not related to the virgin account, but it's previously been suggested about you claiming PIP*.

If you do it, and are awarded it, before reaching state pension age, both elements are available and continue after reaching SPA. 

If you've not claimed PIP and look to do it after reaching SPA you can only claim attendance allowance. It only has one element, personal care.

This will boost your overall income as it's not means tested e.g. doesn't matter if you're working, have millions in the bank etc.

* PIP / Scottish disability payment depending on where you live.

Molly4

k_man said:

Another thought, make sure you keep the MPlus Account (current) as close to £1000 as you can, until the anniversary of the account, to get the most of the 3% bonus interest.

Thank You. I already have just over the £1,000 in there at the moment. I know I won't get paid any Interest on the amount over the £1,000 but at least I can be sure to be getting the maximum I am entitled to. 

From all the documentation/terms and conditions I have I am aware that I have to keep the account open until at least June 2023 so they can pay the 3% into this account. I won't receive the 3% bonus Interest if I close this account as they will not pay it into any other account. 

Molly4

MovingForwards said:

One other thing, not related to the virgin account, but it's previously been suggested about you claiming PIP*.

If you do it, and are awarded it, before reaching state pension age, both elements are available and continue after reaching SPA. 

If you've not claimed PIP and look to do it after reaching SPA you can only claim attendance allowance. It only has one element, personal care.

This will boost your overall income as it's not means tested e.g. doesn't matter if you're working, have millions in the bank etc.

* PIP / Scottish disability payment depending on where you live.

Thank you.

"but it's previously been suggested about you claiming PIP*.

I assume you got this from one of my previous posts from last year. I did successfully claim PIP and I am in receipt of it now. I also get Contribution based ESA. Despite my income being very low it is still above the threshold for getting many other Benefits and Discounts. If I were getting Income-based ESA it would be a whole different story as I would qualify for so much more even with my savings. 

Band7

Molly4 said:

p00hsticks said:

Molly4 said:

RG2015 said:

I was reading about pension credit the other day and was interested to see that it wasn’t automatically affected by having savings or owning your home.

 @Molly4 , I assume that you are aware of this and will be prepared when you get closer to state pension age.

Yes I am aware and am counting the days until I get my State Pension. 628 days to go!!!

@Molly4

Apologies if it;s already been mentioned, i haven't read the entire thread.

Have you got yourself a State Pension forecast to check that you are on track to receive the maximum amount , or whether there are possibilities for you to improve it ?

https://www.gov.uk/check-state-pension

@p00hsticks Yes I have had a pension forecast and I am currently continuing to pay NI contributions even though I am not working so I can get the full State Pension when it is due to be paid to me. This will be in 1 year 8 months and 18 days time which is 20 months or 89 weeks or 627 days from now. Not that I am counting!!!! 

Someone mentioned Pension Credits in an earlier comment. There is no point in me looking into Pension Credits at present as there are going to be an awful lot of changes between now and 627 days time. 

If you get the full state pension, currently max £185.15 a week, you won't be eligible for pension credit, anyway.

There's next to no chance IMO for the general eligibility criteria for pension credit to change.

Band7

Molly4 said:

k_man said:

Another thought, make sure you keep the MPlus Account (current) as close to £1000 as you can, until the anniversary of the account, to get the most of the 3% bonus interest.

Thank You. I already have just over the £1,000 in there at the moment. I know I won't get paid any Interest on the amount over the £1,000 but at least I can be sure to be getting the maximum I am entitled to. 

From all the documentation/terms and conditions I have I am aware that I have to keep the account open until at least June 2023 so they can pay the 3% into this account. I won't receive the 3% bonus Interest if I close this account as they will not pay it into any other account. 

Have you paid any money into a cash ISA this year? If not, have a look at the Virgin instant access 3% ISA. 

You could/should pay anything above £1,000 in your Virgin current account into that ISA. Also anything you have in the linked Virgin savings account. You can put up to max £20,000 a tax year into the ISA, and you can make as many withdrawals as you like.

Then, when your current account interest drops below 3%, move the £1,000 into the ISA, too. Always assuming they don't drop the 3% rate, which they could as it is variable.

Molly4

Band7 said:

Molly4 said:

k_man said:

Another thought, make sure you keep the MPlus Account (current) as close to £1000 as you can, until the anniversary of the account, to get the most of the 3% bonus interest.

Thank You. I already have just over the £1,000 in there at the moment. I know I won't get paid any Interest on the amount over the £1,000 but at least I can be sure to be getting the maximum I am entitled to. 

From all the documentation/terms and conditions I have I am aware that I have to keep the account open until at least June 2023 so they can pay the 3% into this account. I won't receive the 3% bonus Interest if I close this account as they will not pay it into any other account. 

Have you paid any money into a cash ISA this year? If not, have a look at the Virgin instant access 3% ISA. 

You could/should pay anything above £1,000 in your Virgin current account into that ISA. Also anything you have in the linked Virgin savings account. You can put up to max £20,000 a tax year into the ISA, and you can make as many withdrawals as you like.

Then, when your current account interest drops below 3%, move the £1,000 into the ISA, too. Always assuming they don't drop the 3% rate, which they could as it is variable.

I have never used an ISA so don't know how it works. If I can make as many withdrawls as I like do I still get 3% Interest on the remaining balance? Also how long is the ISA for? So if I had a max £20,000 to invest in an ISA each tax year would I just keep adding to the same ISA or do I open a new one each Tax Year? 

badger09

badger09 said:

Molly4 said:

Yorkie006 said:

@Molly4 If you don't want to switch banks, Virgin does have an easy access ISA paying 3% AER available to existing current account customers. Might be worth considering as most other non-ISA easy access accounts are paying less then that. You can always move it to a different account if a better offer comes along.

Thank you for pointing this out. I don't actually know anything about ISA's and how they work.

Put very simply, you are allowed to pay up to £20,000 into ISAs every tax year (eg 6/4/22-5/4/23)

There are different types of ISA - Cash, Stocks & Shares (& others which are probably irrelevant to you). You can only pay into one of each type each year, but total paid in can’t exceed £20k

There is no tax liability on anything inside an ISA. That again probably doesn’t affect you, but for the first time in many years, the interest rates on Easy Access Cash ISAs is the same ir even higher, than normal savings accounts. 

If you open the ISA mentioned by Yorkie006 you can transfer up to £20k of your savings into it & earn 3% (rather than 2%) a year. 

@Molly4

Have another read of my post above. 

You can pay up to £20k into this ISA & withdraw as and when you want. You don't have to open a new ISA every tax year, you can keep using this one.

The main thing to remember is that it is Variable rate, meaning Virgin can change the rate, either up or down, any time they like. If they change it downwards, you simply transfer the money elsewhere.
If you want to keep it inside a (tax protected) ISA, you simply ask a new ISA provider to arrange the transfer for you.
I suspect the tax advantage is of little or no use to you, and the only I mentioned it is because this particular Cash ISA is paying a better rate than most other savings accounts and you're already a customer at Virgin so opening one should be very easy.

Molly4

@badger09

Thank you. I will take a look at the ISA option when I am able to. 

Regards

Molly4