Reaching £1000 interest PSA

RG2015

I currently am forecasting the following annual interest on my high rate savings accounts.

First Direct 7% £136.50

Club Lloyds 6.25% £162.50

Skipton 7.5% £121.88

NatWest 6% £189

RBS 6% £189

Lloyds 5.25% £85.31

Nationwide 5.25% £49.50

Total £933.48

This excludes any other easy access accounts. If I include these I will be above £1,000 and be taxed on the excess. £1,700 at 4% takes me over my PSA. Thereafter a 4% easy access account is only worth 3.2%

Hence my easy access funds are all in the Virgin Money ISA at 3.75%. I currently have no interest in the easy access race, as it would need to be above 4.68% to beat 3.75% net.

I guess many on this site are now being drawn into this scenario.

ColdIron

RG2015 said:

I currently have no interest in the easy access race, as it would need to be above 4.68% to beat 3.75% net.

If you haven't used your ISA allowance then that's an obvious target, if you have then 80% of something is better than 0% of nothing

RG2015

ColdIron said:

RG2015 said:

I currently have no interest in the easy access race, as it would need to be above 4.68% to beat 3.75% net.

If you haven't used your ISA allowance then that's an obvious target, if you have then 80% of something is better than 0% of nothing

Sorry, when I say I have no interest, I didn’t mean I have no non ISA EA interest paying accounts. I meant the race didn’t interest me.  

I will breach 2023/2024 and 2024/2025 so am already projecting tax for these two years. My main aim is to minimise the tax liability.

My flexible VM EA ISA is from 2020 and I have a fixed rate ISA from last year.

I am holding back on this year’s ISA allowance while rates are still surging. The main reason for this is my aversion to transferring ISAs. Irrational maybe, but that’s how I feel.

Dazed_and_C0nfused

My main aim is to minimise the tax liability.

Do you really mean that?

Not very MSE!

ColdIron

RG2015 said:

ColdIron said:

RG2015 said:

I currently have no interest in the easy access race, as it would need to be above 4.68% to beat 3.75% net.

If you haven't used your ISA allowance then that's an obvious target, if you have then 80% of something is better than 0% of nothing

My main aim is to minimise the tax liability.

My main aim is to maximise my return, taxed or otherwise

Setting aside the ISA issue for a moment, you could keep your cash in a 0% account. That would satisfy your main aim but it wouldn't satisfy mine

Perhaps this isn't a tax issue at all (you have the solution) but a timing one. If you use your allowance now and overcome your aversion to ISA transfers it would solve both the tax and return puzzles. Hurrah, a marriage made in heaven

TheBanker

I'm a higher rate taxpayer, so only have a £500 allowance then get taxed at 40%. I moved the bulk of my savings to an ISA last year to utilise my ISA allowance. More will have to go over shortly because the latest round of rate increases will push my non ISA interest over £500. 

By and large ISA transfers go through without issue. There seem to be occasional issues reported here with Virgin Money and NS&I so avoid those if you might want to transfer (assuming your existing VM ISA hasn't had any 2023/4 subscriptions). Most providers use an electronic transfer system for cash ISAs. A few smaller institutions still use paper forms and cheques sent by post - they are best avoided. 

The last ISA transfer I did was completed within a couple of days (Santander to Shawbrook). I got a letter from Santander confirming they'd received my request, which arrived about two weeks after the money had arrived in Shawbrook!

RG2015

Dazed_and_C0nfused said:

My main aim is to minimise the tax liability.

Do you really mean that?

Not very MSE!

Oops. Very careless of me.

Once again failing to verbalise my thoughts accurately.

@Polymaff picked me up on my "slapdash posting" when I was a newbie here in 2015.

I remain grateful for the feedback which may one day pay some dividends.

badger09

RG2015 said:

Dazed_and_C0nfused said:

My main aim is to minimise the tax liability.

Do you really mean that?

Not very MSE!

Oops. Very careless of me.

Once again failing to verbalise my thoughts accurately.

@Polymaff picked me up on my "slapdash posting" when I was a newbie here in 2015.

I remain grateful for the feedback which may one day pay some dividends.

Ahh so you’ve decided to diversify into S&S ISA😘

Sorry. I’ll get my coat

RG2015

ColdIron said:

RG2015 said:

ColdIron said:

RG2015 said:

I currently have no interest in the easy access race, as it would need to be above 4.68% to beat 3.75% net.

If you haven't used your ISA allowance then that's an obvious target, if you have then 80% of something is better than 0% of nothing

My main aim is to minimise the tax liability.

My main aim is to maximise my return, taxed or otherwise

Setting aside the ISA issue for a moment, you could keep your cash in a 0% account. That would satisfy your main aim but it wouldn't satisfy mine

Perhaps this isn't a tax issue at all (you have the solution) but a timing one. If you use your allowance now and overcome your aversion to ISA transfers it would solve both the tax and return puzzles. Hurrah, a marriage made in heaven

I already have an easy access 3.75% flexible ISA account. There is nothing better currently available.

I am not sure what you are suggesting as a better ISA option.

WHUFC123

I have Isa but my other accounts will accrue 5k interest in next year I earn 13k pension will I pay tax on it all

RG2015

badger09 said:

RG2015 said:

Dazed_and_C0nfused said:

My main aim is to minimise the tax liability.

Do you really mean that?

Not very MSE!

Oops. Very careless of me.

Once again failing to verbalise my thoughts accurately.

@Polymaff picked me up on my "slapdash posting" when I was a newbie here in 2015.

I remain grateful for the feedback which may one day pay some dividends.

Ahh so you’ve decided to diversify into S&S ISA😘

Sorry. I’ll get my coat

What a rich language we do indeed enjoy, with or without the use of metaphor.

Like Rhyming Slang, it clearly devised to separate those with English as their mother tongue from those without that attribute.

Possibly also applying to those from either side of the upapples / downapples divide.