NS&I Green Savings Bond

BooJewels

LightKnow said:

^ I used interest calculator on this site but it wouldn't let me leave out how much you put away a month. So so added 1p 

Sounds like you used a regular saver calculator, if you had to add a monthly deposit to it.

To work out the interest over 3 years, the quick and dirty method is to work out the interest for a year, add that to the principle (amount you put in) in the account, work out the interest for the second year on the principle plus the 1 year of interest that was added etc.  Thus:

Year 1:  £3,000 @ 5.7% (3,000 x 0.057) = £171 = £3,171
Year 2:  £3,171 @ 5.7% (3,171 x 0.057) = £180.75 = £3,351.75
Year 3:  £3,351.75 @ 5.7% (3,351.75 x 0.057) = £191.05 = £3,542.80  

So your interest compounded over 3 years would be £542.80.  NS&I also publish that each £1,000 saved will be worth £1,180.93 after three years - which multiplied by 3 is indeed £542.80 of interest.  The published details on all saving accounts tends to show you what £1,000 would be worth at the end of the term, so you just need to multiply that by how many thousands you want to save.

refluxer

Yes, I think the calculators on the MSE site are for people who want to save on a regular basis and therefore aren't really geared towards this kind of 'lump sum' calculation.

@LightKnow - in addition to the calculation @BooJewels mentioned above, as interest is paid into this account (and therefore allowed to compound), you can also do another small calculation to work out the average return each year over the fixed rate period, if you're interested... 

£542.80 total interest / £3,000 initial lump sum = 0.1809, so 18.09% total growth
18.09% / 3 = an average return of 6.03% PA over those 3 years. 

LightKnow

I seriously like this forum, Thank you to the above users. ( Didn't think it be that straight forward to calculate)

Want2BeDebtFree

I actually DID manage to buy the NS&I Green Bonds back in 2023 at 5.7%.  I bought £75K worth of these NS&I Green Bonds.  So they are due to mature next year (2026).   I am a (youngish) pensioner under 60yrs. My private pension is not much and I DO NOT pay Tax on it...  Can some expert tell me  how NS&I will work out the Tax I need to pay on these 3 Green bonds?  (Each Bond was £25K)... Will the Tax be taken automatically by HMRC?  Will HMRC take it from my pension?   Or will NS&I just transfer the Tax to HMRC??  What is the protocol guys?   Never done this before you see as I am a "newish" Pensioner.  

Swipe

Want2BeDebtFree said:

I actually DID manage to buy the NS&I Green Bonds back in 2023 at 5.7%.  I bought £75K worth of these NS&I Green Bonds.  So they are due to mature next year (2026).   I am a (youngish) pensioner under 60yrs. My private pension is not much and I DO NOT pay Tax on it...  Can some expert tell me  how NS&I will work out the Tax I need to pay on these 3 Green bonds?  (Each Bond was £25K)... Will the Tax be taken automatically by HMRC?  Will HMRC take it from my pension?   Or will NS&I just transfer the Tax to HMRC??  What is the protocol guys?   Never done this before you see as I am a "newish" Pensioner.  

The good news is that you don't need to do anything as NS&I will report the interest eaned to HMRC on maturity and they will change your tax code or give you the option to pay it as a one off payment for any tax due. The bad news is that the whole 3 years interest is taxable at maturity in one single tax year. You will get a letter which might even be the following year after maturity from HMRC if they mature after 6th April.

eskbanker

Swipe said:

Want2BeDebtFree said:

I actually DID manage to buy the NS&I Green Bonds back in 2023 at 5.7%.  I bought £75K worth of these NS&I Green Bonds.  So they are due to mature next year (2026).   I am a (youngish) pensioner under 60yrs. My private pension is not much and I DO NOT pay Tax on it...  Can some expert tell me  how NS&I will work out the Tax I need to pay on these 3 Green bonds?  (Each Bond was £25K)... Will the Tax be taken automatically by HMRC?  Will HMRC take it from my pension?   Or will NS&I just transfer the Tax to HMRC??  What is the protocol guys?   Never done this before you see as I am a "newish" Pensioner.  

The good news is that you don't need to do anything as NS&I will report the interest eaned to HMRC on maturity and they will change your tax code or give you the option to pay it as a one off payment for any tax due. The bad news is that the whole 3 years interest is taxable at maturity in one single tax year.

I was just about to post something similar, but with the caveat that there might not actually be any tax liability if the interest on top of OP's small (but unquantified) pension doesn't exceed £18,570, assuming no other taxable income, no marriage allowance, etc....

Want2BeDebtFree

Thank you so much for replying to quickly, both "Eskbanker" and "Swipe",  because this has been stressing me out for some time now.  The Maturity Date for the 4 "NS&I Green Bonds" is 24 October 2026.  I am married yes. My Husband retires next year. I retired early at 50 to be a "Stay at home, Home-maker" and to look after our pets.  My small company pension is around the £9 thousand per year mark,  so I do not pay any tax on it.  Sorry I made a mistake on my first "Original Post"... Just logged into NS&I to double check - and I actually bought FOUR BONDS!!  I bought £100K worth of NS&I Green Bonds in 2023... Seems so long ago now,  I forgot!  (Sorry).  The lady at NS&I on the phone (in 2023)  said after the 3 years I would earn £18K interest... Btw I've just asked my Husband "Are we getting marriage allowance??" (Cos I have no idea?)  And he is asleep, and he just grunted "I dunno??"... So I will have to ask him again tomorrow for a definitive answer... 

eskbanker

If you have four bonds and £9K of pension income then there will be a tax liability, regardless of marriage allowance, but you won't need to do anything about it for a couple of years - the bond interest will be payable in the 2026/27 tax year and HMRC will be made aware of it by NS&I in mid 2027, after which they'll contact you to establish how to collect the tax due.  Nothing you need to do until they contact you then....

DRS1

Ignorant question but if you get more than £10k of interest in a year aren't you supposed to do a self assessment tax return?

dgpur

DRS1 said:

Ignorant question but if you get more than £10k of interest in a year aren't you supposed to do a self assessment tax return?

Yes, though there are other criteria as well. https://www.gov.uk/check-if-you-need-tax-return