Reaching £1000 interest PSA

RG2015

To add a bit more context, my first post doesn’t precisely reflect my figures for either 2023/2024 or 2024/2025.

As it stands, I could avoid paying tax this year by emptying my Barclays 5% and NatWest/RBS 6% accounts.

However, there is nowhere I could put it to allow instant access and earn more than the 4.8% net on the NW/RB accounts. Plus these accounts need time to build up to a decent level

The Barclays 4% net may be under threat if rates on EA flexible ISA accounts rise much more.

aroominyork

Have you considered individual gilts? See this thread. TN25, maturing 31/1/25 but tradeable whenever you want, is currently yielding about 5.3% with nearly all of it a non-taxed capital gain.

RG2015

aroominyork said:

Have you considered individual gilts? See this thread. TN25, maturing 31/1/25 but tradeable whenever you want, is currently yielding about 5.3% with nearly all of it a non-taxed capital gain.

Interesting thought, but one of my criteria is simplicity.

I also have an additional route as my wife has about £18k unused personal tax allowance. This is the destination for longer fixes. That said, I am currently limiting these to no more than one year on a monthly maturity ladder.

subjecttocontract

With interest payments creeping up we now jointly get approx' £25K in interest pa and around £6000 of it is taxable. It would be a lot more but we do like to spend our money. Spending it is a great way of avoiding income tax.

Doctor_Who

WHUFC123 said:

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

Very similar post here with answers:

https://forums.moneysavingexpert.com/discussion/6454731/how-much-interest-can-a-pensioner-get-tax-free

You'll also find more information on the MSE website:

https://www.moneysavingexpert.com/savings/tax-free-savings/

aroominyork

RG2015 said:

aroominyork said:

Have you considered individual gilts? See this thread. TN25, maturing 31/1/25 but tradeable whenever you want, is currently yielding about 5.3% with nearly all of it a non-taxed capital gain.

Interesting thought, but one of my criteria is simplicity.

I also have an additional route as my wife has about £18k unused personal tax allowance. This is the destination for longer fixes. That said, I am currently limiting these to no more than one year on a monthly maturity ladder.

Nominal gilts are not as complicated as you’d think (if they are available on your platform). The concept sounds sophisticated but it’s just like buying a share. If you want less than one year then TN24 matures on 31/1/24, pays 0.125% interest (the only bit you would pay tax on) and is trading at 97.04 so in the seven months to maturity it yields a tax free (100-97.04)/97.04 = 3.05%/7*12 = 5.22% plus a tiny bit of taxed coupon.

zagfles

aroominyork said:

RG2015 said:

aroominyork said:

Have you considered individual gilts? See this thread. TN25, maturing 31/1/25 but tradeable whenever you want, is currently yielding about 5.3% with nearly all of it a non-taxed capital gain.

Interesting thought, but one of my criteria is simplicity.

I also have an additional route as my wife has about £18k unused personal tax allowance. This is the destination for longer fixes. That said, I am currently limiting these to no more than one year on a monthly maturity ladder.

Nominal gilts are not as complicated as you’d think (if they are available on your platform). The concept sounds sophisticated but it’s just like buying a share. If you want less than one year then TN24 matures on 31/1/24, pays 0.125% interest (the only bit you would pay tax on) and is trading at 97.04 so in the seven months to maturity it yields a tax free (100-97.04)/97.04 = 3.05%/7*12 = 5.22% plus a tiny bit of taxed coupon.

Looks like that's the mid price rather than offer price plus don't forget to account for any trading costs and custody charges your broker may charge. Still could be a good deal though...

drlabman

RG2015 said:

aroominyork said:

Have you considered individual gilts? See this thread. TN25, maturing 31/1/25 but tradeable whenever you want, is currently yielding about 5.3% with nearly all of it a non-taxed capital gain.

Interesting thought, but one of my criteria is simplicity.

I also have an additional route as my wife has about £18k unused personal tax allowance. This is the destination for longer fixes. That said, I am currently limiting these to no more than one year on a monthly maturity ladder.

These high interest rates are turning into a right old nightmare.  I've had to start putting savings in my wife's name again and, shock horror, even into ISAs.  Haven't had to bother for years.  Even worse, as I rapidly approach state pension age, I'm dangerously close to (if not already over) the 40% tax threshold - and I hate paying 40% tax with a passion.

RG2015

drlabman said:

RG2015 said:

aroominyork said:

Have you considered individual gilts? See this thread. TN25, maturing 31/1/25 but tradeable whenever you want, is currently yielding about 5.3% with nearly all of it a non-taxed capital gain.

Interesting thought, but one of my criteria is simplicity.

I also have an additional route as my wife has about £18k unused personal tax allowance. This is the destination for longer fixes. That said, I am currently limiting these to no more than one year on a monthly maturity ladder.

These high interest rates are turning into a right old nightmare.  I've had to start putting savings in my wife's name again and, shock horror, even into ISAs.  Haven't had to bother for years.  Even worse, as I rapidly approach state pension age, I'm dangerously close to (if not already over) the 40% tax threshold - and I hate paying 40% tax with a passion.

You may be able to reduce your tax liability and avoid the dreaded 40% by contributing to a SIPP. I have been drawing my SP for over a year and am going to look at SIPPs.

It will be very tax efficient for my wife as she is a few years off SP age and may also save me a bit of tax.

drlabman

RG2015 said:

drlabman said:

RG2015 said:

aroominyork said:

Have you considered individual gilts? See this thread. TN25, maturing 31/1/25 but tradeable whenever you want, is currently yielding about 5.3% with nearly all of it a non-taxed capital gain.

Interesting thought, but one of my criteria is simplicity.

I also have an additional route as my wife has about £18k unused personal tax allowance. This is the destination for longer fixes. That said, I am currently limiting these to no more than one year on a monthly maturity ladder.

These high interest rates are turning into a right old nightmare.  I've had to start putting savings in my wife's name again and, shock horror, even into ISAs.  Haven't had to bother for years.  Even worse, as I rapidly approach state pension age, I'm dangerously close to (if not already over) the 40% tax threshold - and I hate paying 40% tax with a passion.

You may be able to reduce your tax liability and avoid the dreaded 40% by contributing to a SIPP. I have been drawing my SP for over a year and am going to look at SIPPs.

It will be very tax efficient for my wife as she is a few years off SP age and may also save me a bit of tax.

Must admit, I know nothing about SIPPs - they became "a thing" when I was living abroad I think.  I shall take a look.  It's fair to say that these are first world problems though.