NS@I 3 year Green Bond 5.7%

Albermarle

auser99 said:

Albermarle said:

You'd think somewhere along the line of that 3 years inflation is well under 5.7% too (awaits experts telling me that's a foolish thing to say, and that as it's taxable it'd have to be xxx% under this to capitalise anyway etc )

It is quite possible that in a couple of  years time inflation will be below where you can currently fix interest rates.

There have been periods in the past when cash has beaten inflation, but normally in the long run the only way to beat inflation consistently is to invest.

Regarding tax there are various tax breaks, that can reduce tax on interest, or you can put it in an ISA instead.

Current best 3 year fix ISA rates are 5.55% to 5.65% and not with 'randoms' Providers such as West Bromwich BS , Leeds BS and Aldermore are offering these.

This is all on the premise that the ISA route has been maximised.

As a resident expert, and maybe the wrong thread for it, do you know much about salary sacrifice?
Is that simply paying say 10k into it, meaning that figure is taken off your salary, and thus like standard pension contributions this figure isn't taxed?

Or is it only a percentage (maybe 25% I read about something maybe unrelated) that is the tax break?

I'm intrigued as a 60+ year old at work told me he'd paid something like 40k into his pension in 1 year?!

Although you have a good answer, better to have started a new thread on the pensions board, where there are lots of threads mentioning salary sacrifice.
By the way you can put £40K in your pension by other means than salary sacrifice, if you earn enough and can afford to of course.

ranciduk

ConsistentlyLost said:

Hi Folks!

My mum deposited money into these back in February when the rate was 4.2%. Will she get this higher rate of 5.7% or is she stuck at 4.2%? 

Unlike other fixes it seems the money is truly locked away with these as I don't see an option to withdraw/close early and take the hit from a penalty.

Tia

No she is stuck at 4.2%

But it could be worse, I’m currently a year into my green bonds - paying 1.3% !!!

😿

ossie48

In relation to this bond. My wife is a non earner with zero income. If she was to stick £100,000 in next week how much tax would she end up paying on conclusion of the three year term ? Thks.    

masonic

ossie48 said:

In relation to this bond. My wife is a non earner with zero income. If she was to stick £100,000 in next week how much tax would she end up paying on conclusion of the three year term ? Thks.    

She'd earn just short of £18.1k, the amount of tax would depend on the personal allowance at that time, but in the region of £800.

FatFred66

masonic said:

ossie48 said:

In relation to this bond. My wife is a non earner with zero income. If she was to stick £100,000 in next week how much tax would she end up paying on conclusion of the three year term ? Thks.    

She'd earn just short of £18.1k, the amount of tax would depend on the personal allowance at that time, but in the region of £800.

With no other income she can currently receive up to £18,570 in savings interest without paying tax.

masonic

FatFred66 said:

masonic said:

ossie48 said:

In relation to this bond. My wife is a non earner with zero income. If she was to stick £100,000 in next week how much tax would she end up paying on conclusion of the three year term ? Thks.    

She'd earn just short of £18.1k, the amount of tax would depend on the personal allowance at that time, but in the region of £800.

With no other income she can currently receive up to £18,570 in savings interest without paying tax.

Thanks, yes sorry, I mistakenly thought all income counted towards the £17,570 limit used to assess whether the starting rate for savings applies. In fact, it seems savings interest itself is excluded from this test. All of course assuming the starting savings rate exists in its current form in 3 years time (and doesn't face a similar fate as the dividend and capital gains allowances).