Maturing regular savers and monthly interest paying accounts - staying under the PSA?

orange-juice

Context: I (and I'm sure a few others on this board) have several of regular savers, most set to mature near the end of this tax year, when I'll receive the interest. Meanwhile, I have a few high-interest accounts that pay monthly.

Problem: According to my spreadsheet (which may not be accurate!!), I'll be very tight or may exceed my personal savings allowance if I receive three or four more interest payments from the monthly paying accounts, along with the lump-sum annual interest from the regular savers.

Note: I've opened the YBS cash ISA so far.

I wonder how others are planning to stay under their PSA?

- Move a particular amount of money immediately into the ISA, so that the monthly interest payments from those accounts are lowered and then receive interest from regular savers as they mature.

- stop paying into and/or close a couple of regular savers early and keep the money in the high interest accounts and continue receiving the monthly interest?

- not thinking about it and just pay the tax on the interest?

- something else?

eskbanker

Best thing to do is to focus on maximising net return, rather than trying to minimise tax as such - sometimes they can result in the same thing but often not....

auser99

I saw someone using a good expression the other day on here, saying trying to reduce tax in the sort of artificial ways mentioned is actually a bit like the tail wagging the dog.

VNX

I have opened up a 1 a 2 and 3 year bond each payable on maturity in order to spread out interest payments over a number of tax years which allows me to take advantage of the best rates but also avoid tax and as each bond matures that can go into a new ISA 

[Deleted User]

I've calculated that I'll be close to the PSA and I've moved part of my savings to my ISA already because I know I'd be irritated if I went over by say 10s of pounds and HMRC amended my tax code, whereas if I was over the PSA by a more significant amount, say 100s, I'd agree with eskbanker about maximising the net return. 

For me personally it's like being a minute late!

I'm still continuing to save in the regular savers and fixed savers so in future years will likely exceed the PSA.

Albermarle

auser99 said:

I saw someone using a good expression the other day on here, saying trying to reduce tax in the sort of artificial ways mentioned is actually a bit like the tail wagging the dog.

The usual phrase is ' Don't let the tax tail, wag the investment dog' 

The issue is that some people hate paying tax so much they will make bad decisions in  pursuit of their goal, and end up worse off.

wiseonesomeofthetime

I'll exceed the PSA again, so just earn as much interest as possible and pay my dues on day of reckoning 🤷‍♂️

JGB1955

80% of something is far more worth than 0% of nothing.

[Deleted User]

@JGB1955 I agree though happy with my plan and I'm on target to meet my savings goal which is what matters to me ... 

Qyburn

JGB1955 said:

80% of something is far more worth than 0% of nothing.

The question is really whether 80%of 3.25% is worth more than 100% of 3.2%. Substitute your own ISA and non-ISA interest rates.

Sarahspangles

Spreadsheet city here too.  ISAs, Premium Bonds and pension contributions into SIPPs (but only because those suit our age/stage).