I've got £100,000 cash savings in my current account | Is Skipton Base-rate Savings the 1# choice?

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  • I've got just over £100,000 cash savings | Which for the past few years I've just left sat in my Barclays current-account (0% interest

    As this a savings forum, where people swap accounts to gain 0.1% extra interest, there should be warning before being able to read such statements. So we could at least sit down first !

    :D:D haha
  • boingy
    boingy Posts: 1,330 Forumite
    First Post Name Dropper
    Definitely put 20K into a cash ISA and put another 20K in next April.
    If you are a higher rate taxpayer consider putting 50K into Premium Bonds. With average luck you'll get a decent return and it's tax free.
  • lr1277
    lr1277 Posts: 1,681 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    edited 6 December 2023 at 5:25PM
    I don’t know the answers to the following and raise them so more knowledgeable people can advise.

    How does the personal savings allowance fit in to the amount of interest the OP will potentially earn?
    If the OP earns in excess of the allowance, will the OP have to complete a self assessment return and pay any tax? 
    Premium bonds and cash ISA’s can reduce the tax burden. Does the OP keep £20k in the Skipton, till they are ready to fund their 23-24 cash ISA?
    I suppose £50k into premium bonds and then £20k into a cash ISA, leaves £30k to gain taxable interest. Then another £20k into a cash ISA in April. So the personal savings allowance might not even apply?
    OP here are some caveats.
    Read the Premium bonds thread on this board (the one with more than 800 pages). At least the last few pages. You will see some people with a full holding of £50k (FH) don’t win anything for months. How will you feel if your money wins nothing so you could have left it in Skipton?
    Cash ISA’s tend to pay less interest than taxable savings accounts. You need to work out how much less and if that is worth it for potentially not completing a tax return.
    Finally my own view is don’t let the tax tail wag the income earning dog. If you can get a higher income but need to pay tax on it and complete a tax return, then I would go for it.
    HTH
    Edited to tidy up a few things
  • jimjames
    jimjames Posts: 17,611 Forumite
    Photogenic Name Dropper First Anniversary First Post
    edited 6 December 2023 at 6:33PM
    boingy said:
    Definitely put 20K into a cash ISA and put another 20K in next April.
    If you are a higher rate taxpayer consider putting 50K into Premium Bonds. With average luck you'll get a decent return and it's tax free.
    I'm not sure it's quite as easy or obvious as that. 

    You also need to think whether you actually need £100k in cash savings at all especially if it's just been sat there for years. First get it somewhere paying interest but secondly you need to consider if there is a better place for some of it such as pension or investments (possibly via S&S ISA.) For a higher rate taxpayer a pension contribution is probably a better option than premium bonds as you'll be boosted by 40% immediately.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • jimjames said:

    You also need to think whether you actually need £100k in cash savings at all especially if it's just been sat there for years. .
    This 100k is just gonna be used towards getting a mortgage (most likely in 9-12 months time).

  • boingy
    boingy Posts: 1,330 Forumite
    First Post Name Dropper
    jimjames said:
    boingy said:
    Definitely put 20K into a cash ISA and put another 20K in next April.
    If you are a higher rate taxpayer consider putting 50K into Premium Bonds. With average luck you'll get a decent return and it's tax free.
    I'm not sure it's quite as easy or obvious as that. 

    You also need to think whether you actually need £100k in cash savings at all especially if it's just been sat there for years. First get it somewhere paying interest but secondly you need to consider if there is a better place for some of it such as pension or investments (possibly via S&S ISA.) For a higher rate taxpayer a pension contribution is probably a better option than premium bonds as you'll be boosted by 40% immediately.
    If you read the first post he wants the money for a mortgage, probably within the next year. My suggestion is assuming he already earns quite a bit because he's managed to save £100K and is talking about adding another £40k to £50k
  • Albermarle
    Albermarle Posts: 22,108 Forumite
    First Anniversary First Post Name Dropper
    How does the personal savings allowance fit in to the amount of interest the OP will potentially earn?
    If the OP earns in excess of the allowance, will the OP have to complete a self assessment return and pay any tax? 

    You do not need to fill in a SA tax return just because of savings interest. The providers inform HMRC of the interest you have earned and they calculate any tax liability automatically. Unless you earn over £10K in interest then you do have to fill in a return .

    Cash ISA’s tend to pay less interest than taxable savings accounts. You need to work out how much less and if that is worth it for potentially not completing a tax return

    You are correct that historically ISA interest rates have been less, but in recent times many cash ISA's have been paying similar rates to equivalent non isa accounts. 

  • I would be inclined to split some between Skipton and fix others in notice accounts. Oxbury pay 5.51% for 90 days notice.
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