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

MDMD

Qyburn said:

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.

And tax rates. At 40% tax even a 5% account becomes 3% which can then be beaten in an ISA or by a mortgage overpayment 

Frogletina

I'm starting to close my lowest regular savers to fund my higher ones.

I have the YBS flexible Isa which I can draw from to feed my regular savers, but I get more interest from the Isa than my four 4.5% regular savers. 

I may close and re-open some at higher rates, which will also push the tax into the next year, or reduce the deposits to £1. My spreadsheets show that at the moment I will exceed the PSA by about £200 if I keep them all open and fully funded.

I'm happy to use my flexible Isa for higher paying RS accounts and at the maturity of them I can replenish my Isa.

TheBanker

I'm a higher rate tax payer so only have a £500 PSA and get taxed at 40% if I exceed it. 

My strategy is now to maximise my ISA usage. I transferred most of my instant access to a cash ISA at the end of March as I had enough of last year's allowance available. My ISA currently pays 3.2% so I'd need to earn over 5% outside an ISA to make it worthwhile paying tax. I'm using the £500 allowance to cover Regular Savers etc that cannot be held in an ISA as well as existing non-ISA fixed rate accounts due to mature this year. 

A minor additional benefit of the ISA is that it slightly simplifies the process of completing a tax return.

jimexbox

I make use of my wife's PSA, as well as my own. It's useful she benefits from the starting savings rate. So I (we) fund accounts that maximise both interest and each others tax free allowance. 

TheBanker

jimexbox said:

I make use of my wife's PSA, as well as my own. It's useful she benefits from the starting savings rate. So I (we) fund accounts that maximise both interest and each others tax free allowance. 

I don't have a wife. Perhaps access to another £1000 PSA should motivate me to get one I will of course check that any prospective wife is not already utilising her full PSA! 

badger09

I will substantially exceed PSA this year but probably not the following year. I closed several Regular Savers at the end of March to bring the interest forward to 2022/23. I will reopen them all now over a few weeks, so have avoided them maturing this year. Bonus is that most have increased their rates. 

I’m also using flexible cash ISA. 

Sarahspangles

TheBanker said:

jimexbox said:

I make use of my wife's PSA, as well as my own. It's useful she benefits from the starting savings rate. So I (we) fund accounts that maximise both interest and each others tax free allowance. 

I don't have a wife. Perhaps access to another £1000 PSA should motivate me to get one I will of course check that any prospective wife is not already utilising her full PSA! 

Reporting in from the WAG camp here!  That was OH’s cunning plan, as 22/23 opened most of my savings were in ISAa or PBs so I agreed he could use some of my PSA.  It was only by luck that I spotted in February that my pay award plus the extra coming in from rising interest rates were about to take me into the higher rate tax band.  I know I wouldn’t have paid much extra, but I didn’t fancy the hassle of getting my tax code adjusted, so I resigned from my role as banker.

badger09

Sarahspangles said:

TheBanker said:

jimexbox said:

I make use of my wife's PSA, as well as my own. It's useful she benefits from the starting savings rate. So I (we) fund accounts that maximise both interest and each others tax free allowance. 

I don't have a wife. Perhaps access to another £1000 PSA should motivate me to get one I will of course check that any prospective wife is not already utilising her full PSA! 

Reporting in from the WAG camp here!  That was OH’s cunning plan, as 22/23 opened most of my savings were in ISAa or PBs so I agreed he could use some of my PSA.  It was only by luck that I spotted in February that my pay award plus the extra coming in from rising interest rates were about to take me into the higher rate tax band.  I know I wouldn’t have paid much extra, but I didn’t fancy the hassle of getting my tax code adjusted, so I resigned from my role as banker.

Probably easier to resign from role of banker than that of wife😉

Albermarle

TheBanker said:

jimexbox said:

I make use of my wife's PSA, as well as my own. It's useful she benefits from the starting savings rate. So I (we) fund accounts that maximise both interest and each others tax free allowance. 

I don't have a wife. Perhaps access to another £1000 PSA should motivate me to get one I will of course check that any prospective wife is not already utilising her full PSA! 

Maybe best not to mention it on the first date