Regular Saver strategy - maximising returns and reinvestment

where_are_we

WindfallWendy - welcome to the Regular Saver (RS) "club". It requires effort and planning and your thinking of it as a hobby is akin to my way of thinking and makes it less onerous. It is very risky to put your money in Stocks and Shares when you might need the money in about 2 years so keeping in cash would be advisable. For the latest RS`s keep a check on the  "Regular Savings Accounts: The Best Currently Available List" thread but check out page 1 first and write a heirarchical list of RS`s to open. With regards to interest rates, fixed rate is preferable to variable rate in a climate of falling interest rates. But interest rates are not the whole story - easy access is good and I use some EARS`s as quasi EA Accounts eg Aldemore RS@5.25%, whereas no withdrawals RS`s might create cash flow problems if good new offers become available. RS`s that allow you to miss monthly payments are also good if you run out of cash to fund them. Some RS`s might not allow withdrawals but do allow closure with no loss of interest so you can get out if available cash is limited or their interest rate becomes uncompetitive. I fund all my RS`s by Standing Order from a current account with little balance by transferring in a large amount on the first of the month from a flexible cash ISA. Beware of paying tax on your interest which will increase due to the better rates you will get with RS`s. Open a top interest paying flexible cash ISA on the 6th April and use this as your EA account to try to keep your interest below your personal savings allowance for 25-26.

Finally, although not about RS`s, I see you have a Halifax current account (CA). A Reward CA can earn a £5 reward every month by setting up a £500 direct debit card payment and putting in/out £1500 each month. You can have up to 3 Reward CA`s so 3x £5 each month.

WindfallWendy

Eco_Miser said:

WindfallWendy said:

When they mature.... This is my current unknown, but I guess the ideal is that you have a portfolio of regular savers, with one maturing each month, and then the (say) £3k maturity cash just gets immediately spread out into other regular savers. 
And therefore the £20k I currently have in a reasonable rate easy access account, ends up dispersed across regular savers and I just work through each to manage monthly payments rather than a nice easy standing order arrangement.

I always move the maturity proceeds (apart from the bit funding the first payment of the replacement RS) back to the Easy Saver where the monthly funding starts, that way there is a nice easy standing order arrangement, irrespective of which, if any, RS matured this month. 

Ooo, this is a gamechanger - I hadn't thought about it just being a case of just moving money between accounts within the same bank. How simple and sensible is that?!! THANK YOU!

ThePirates

3 x £500 debit card transactions is the difficult bit

friolento

ThePirates said:

3 x £500 debit card transactions is the difficult bit

To the best of my knowledge, there is no Regular Saver which requires debit card transactions. But in any case, it’s easy enough to deposit by debit card into certain accounts in your own name. There’s thread somewhere with all the options 


EDIT: link to thread https://forums.moneysavingexpert.com/discussion/6445857/savings-investment-dds-and-debit-card-deposits-an-updated-list/p1

WillPS

where_are_we said:

Finally, although not about RS`s, I see you have a Halifax current account (CA). A Reward CA can earn a £5 reward every month by setting up a £500 direct debit card payment and putting in/out £1500 each month. You can have up to 3 Reward CA`s so 3x £5 each month.

You can also net £3 a month with a reward account from Natwest and RBS, so combined with £15 from Halifax that makes £21 easy cash per month.

You can have one sole and one joint (with both Natwest and RBS), so a couple can earn £18/month from Natwest Group, as well as £30 from Halifax, £48 in total.

WindfallWendy

where_are_we said:

WindfallWendy - welcome to the Regular Saver (RS) "club". It requires effort and planning and your thinking of it as a hobby is akin to my way of thinking and makes it less onerous. It is very risky to put your money in Stocks and Shares when you might need the money in about 2 years so keeping in cash would be advisable. For the latest RS`s keep a check on the  "Regular Savings Accounts: The Best Currently Available List" thread but check out page 1 first and write a heirarchical list of RS`s to open. With regards to interest rates, fixed rate is preferable to variable rate in a climate of falling interest rates. But interest rates are not the whole story - easy access is good and I use some EARS`s as quasi EA Accounts eg Aldemore RS@5.25%, whereas no withdrawals RS`s might create cash flow problems if good new offers become available. RS`s that allow you to miss monthly payments are also good if you run out of cash to fund them. Some RS`s might not allow withdrawals but do allow closure with no loss of interest so you can get out if available cash is limited or their interest rate becomes uncompetitive. I fund all my RS`s by Standing Order from a current account with little balance by transferring in a large amount on the first of the month from a flexible cash ISA. Beware of paying tax on your interest which will increase due to the better rates you will get with RS`s. Open a top interest paying flexible cash ISA on the 6th April and use this as your EA account to try to keep your interest below your personal savings allowance for 25-26.

Finally, although not about RS`s, I see you have a Halifax current account (CA). A Reward CA can earn a £5 reward every month by setting up a £500 direct debit card payment and putting in/out £1500 each month. You can have up to 3 Reward CA`s so 3x £5 each month.

So, just to check personal savings limits..... I had been receiving rental income, but have sold the property now. My understanding is that because I've had rental income in 24/25, my limit is £1000. But in future years, with no rental income, it will return to £10,000 before tax is applied?

I'm keeping an eye on it for sure and planning to make an overpayment into my pension to offset any tax on interest that might be considered as owing.

friolento

WindfallWendy said:

So, just to check personal savings limits..... I had been receiving rental income, but have sold the property now. My understanding is that because I've had rental income in 24/25, my limit is £1000. But in future years, with no rental income, it will return to £10,000 before tax is applied?

I'm keeping an eye on it for sure and planning to make an overpayment into my pension to offset any tax on interest that might be considered as owing.

There are no personal savings limits, just certain rules around the taxation of interest.

If you are a BR tax payer, you get up to £1,000 interest in each tax year without paying tax on it.It's called your Personal Savings Allowance (PSA) and applies to all interest earned outside an ISA. I am afraid, there's no £10,000 allowance. The PSA of a HR tax payer is only £500, and Additional Rate tax payers have a PSA of £0.

In addition to the PSA, everybody can also deposit up to £20k into an ISA (current rules - watch the Budget). All interest earned in an ISA is tax free and does not have to be declared to the HMRC.

Banks will report all non-ISA interest to the HMRC, who will adjust your Tax Code to take into account the interest in your total taxable income. If you earn more than £10,000 in interest outside an ISA, you have to submit a Self Assessment. If you already submit a Self Assessment anyway, it's in your own interest (pun intended) to declare the interest you earned.

friolento

Addendum: income from property rental does not count as interest, and does not alter your PSA or you liability for tax on interest.

Might be best if you employ a tax consultant if you have complex income.

ThePirates

friolento said:

ThePirates said:

3 x £500 debit card transactions is the difficult bit

To the best of my knowledge, there is no Regular Saver which requires debit card transactions. 

It's not a Regular saver, it's the Halifax Rewards account mentioned by @WillPS

friolento

ThePirates said:

friolento said:

ThePirates said:

3 x £500 debit card transactions is the difficult bit

To the best of my knowledge, there is no Regular Saver which requires debit card transactions. 

It's not a Regular saver, it's the Halifax Rewards account mentioned by @WillPS

As I said, in any case, it’s easy enough to deposit by debit card into certain accounts in your own name. Not difficult.