Lloyds/Bank of Scotland/Halifax regular/monthly saver limits

Band7

AmityNeon said:

The below assumes gross interest, continuing to fund £400 per month in both scenarios, and six deposits (£2,400) at 5.25% whilst leaving the excess £2,000 from month 6 onwards in accounts no higher than 3.25%.

Thanks for this. It's made me stop to replace my Club Lloyds and take the risk that there won't be a 6.25% RS on offer once my current one matures.

I have also done the numbers for the 4.5% Regular Savers which go to 5.25%. Similar outcome, not worth my while for now.

Money_Grabber13579

If you were to extend the figures another 6 months though, would that not showing closing and reopening now as being the better option? In that case, you’d be starting from scratch in 6 months time whereas if you closed and reopened now, then in 6 months time you’ll be better off.

I’m not explaining myself very well but I can’t see how sticking with a lower interest rate would ever be the best approach long term. By cutting the analysis off at 6 months, I think it might be showing that sticking is better when it isn’t really?

silvercar

Money_Grabber13579 said:

If you were to extend the figures another 6 months though, would that not showing closing and reopening now as being the better option? In that case, you’d be starting from scratch in 6 months time whereas if you closed and reopened now, then in 6 months time you’ll be better off.

I’m not explaining myself very well but I can’t see how sticking with a lower interest rate would ever be the best approach long term. By cutting the analysis off at 6 months, I think it might be showing that sticking is better when it isn’t really?

True, but other accounts may appear or interest rates change. The further out you look the more variable the possibilities. There is also the PSA tax limit to consider. With higher interest rates generally, you may be more likely to hit the £1000 barrier in 2023-24, so you want to make sure as much interest as possible is in 2022-23 if you haven't hit the £1000 mark yet. 

Frogletina

silvercar said:

Money_Grabber13579 said:

If you were to extend the figures another 6 months though, would that not showing closing and reopening now as being the better option? In that case, you’d be starting from scratch in 6 months time whereas if you closed and reopened now, then in 6 months time you’ll be better off.

I’m not explaining myself very well but I can’t see how sticking with a lower interest rate would ever be the best approach long term. By cutting the analysis off at 6 months, I think it might be showing that sticking is better when it isn’t really?

True, but other accounts may appear or interest rates change. The further out you look the more variable the possibilities. There is also the PSA tax limit to consider. With higher interest rates generally, you may be more likely to hit the £1000 barrier in 2023-24, so you want to make sure as much interest as possible is in 2022-23 if you haven't hit the £1000 mark yet. 

My projections are that having already reached the PSA limit in this tax year, that I'll also hit the limit next year too.

Therefore closing the my two Lloyds accounts and my Halifax in April and then re-opening them will push the latter interest into 2024/25. 

I think I will also utilise my Virgin 3% Isa after April to hold my 2023/24 accessible savings and use it to feed my regular savers and hold the money after they mature. 

I am £100 over my psa limit this year and only have £53 in my easy access Isa as most money went to fixed isas, and the balance into my Yorkshire six access plus some in Zopa and Chase. I withdrew from the Yorkshire Rainy day account as interest is added on 31 March.

AmityNeon

Money_Grabber13579 said:

If you were to extend the figures another 6 months though, would that not showing closing and reopening now as being the better option? In that case, you’d be starting from scratch in 6 months time whereas if you closed and reopened now, then in 6 months time you’ll be better off.

I’m not explaining myself very well but I can’t see how sticking with a lower interest rate would ever be the best approach long term. By cutting the analysis off at 6 months, I think it might be showing that sticking is better when it isn’t really?

Due to the two scenarios being six months apart, they will generally ebb and flow inversely to each other. The problem is we cannot ascertain future accounts and rates, and the further we project, the harder it becomes to predict once you account for tax positions, cash flow, and the availability of numerous other accounts (including regular savers).

I've extended the spreadsheet (click for a direct link to the full-sized image), assuming gross interest, that rates remain static, and continued monthly contributions whilst excess funds are deposited in accounts ranging from 3.2% to 4.5%. It's a bit more convoluted, but the key fields for easy comparison are coloured:

• Pink: Closing/maturity dates and balances
• Yellow: Scenario 1 (hold steady and renew after maturity)
• Scenario 2 (close/renew today)
  • Red: less than yellow
  • Blue: equal to yellow
  • Green: greater than yellow

Essentially, the differences are minor overall even when making the aforementioned assumptions (which will never be the actual case). Obviously, if you still have remaining PSA this year, the more likely it's better to close/renew today. Also, the fewer deposits you've currently made at 5.25%, the more likely it's better to close/renew today.

Sea_Shell

I think my heads going to explode!! 😲🤣

I have 2 X Lloyds

1 BoS

1 Halifax

I might twist on some and stick on others. 

phillw

By my calculation, if you're in the first 3 months then it's worth switching. Otherwise, it's probably not. For both the club lloyds and the lloyds monthly saver.

It was a rough calculation, as I assumed months were 1/12 of a year. Month 4 there is probably a point where it's still worth switching. I'm in month 6 and so I didn't go to such lengths.

However it's a gamble that interest rates won't plummet in the next 6 months.

jblore

I've only just gone to month 4 on my Club Lloyds (so £1600). 
I can also open a regular non-club one as well at the same rate as the old Club (5.25%).

Therefore it's probably a no-brainer for me to close the current Club Lloyds and start on the new 6.25%
The money in my current Club Lloyds would then go into the higher rate CL and the regular one (so lose less to start and gain more).

Does that seem reasonable?

nottsphil

Bojax said:

“ 2. Renew account to another type of saver.” How does that work exactly?

Maybe read the first four replies to the thread?

If the money withdrawn is going into a 3+% account that pays interest on Saturday deposits such as Santander eSaver then it would be advantageous to leave these renewals until the morning. This is because LBG treat weekend withdrawals as happening on the next working day, so the withdrawn money would be earning interest in both accounts for 2 days. I know it's only a few pennies difference but it's for zero extra effort.

nottsphil

AmityNeon said:

Money_Grabber13579 said:

If you were to extend the figures another 6 months though, would that not showing closing and reopening now as being the better option? In that case, you’d be starting from scratch in 6 months time whereas if you closed and reopened now, then in 6 months time you’ll be better off.

I’m not explaining myself very well but I can’t see how sticking with a lower interest rate would ever be the best approach long term. By cutting the analysis off at 6 months, I think it might be showing that sticking is better when it isn’t really?

Obviously, if you still have remaining PSA this year, the more likely it's better to close/renew today. Also, the fewer deposits you've currently made at 5.25%, the more likely it's better to close/renew today.

That's what is known as going 'above and beyond' in helping others to come to a decision on this issue!
Please don't regard it as nitpicking if I pull you up on your advice to act today as I realise you mean 'any time this month' regarding the tax issue. I'd like to offer my own advice, which would be to delay action until the 31st of March for those who have decided to renew this month. This would avoid possibly thousands languishing in instant access accounts for the next 4 weeks whilst still benefitting from a full year's regular saving at the higher rate. Furthermore it would allow for a 13th subscription, meaning a full year's interest on the 31st of March one and almost that on the second one, best made on Monday 3rd of April. That extra subscription on the CLMS alone is worth £25, so probably double what you would have earnt in an instant access account for those 12 months.