savings?

johnaka

if anyone has more than 10 grand in there's saving to which I have.
what is martin lewis on about we could lose money. is he talking about interest? also he mentions that we could owe tax.how the heck does he make that out?
oh and I'm a pensioner. 73 yrs old

mebu60

A little more context would be helpful. If you're referencing an article then a link would be useful. If it's something he's said on tv or radio it's hard to comment without knowing exactly what was said and in what context. 

eskbanker

That might ring some bells for those who watch his TV show but little to go on for the rest of us!

Tax could indeed be applicable for those earning decent (5+%) interest on £10K (outside ISAs) while paying higher rate tax though....

73 year olds are liable to the same tax regime as everyone else of course!

HumberFlyer

I saw bits of it, wasn't he referring to if you are getting say 3% interest on your savings and inflation is say running at 4%..... you are losing money. If you get more than 1k in interest on your savings and you are over the personal allowance.... you pay tax on it. Depending on income you get an extra 5k added to the 1k before being taxed.

eskbanker

HumberFlyer said:

wasn't he referring to if you are getting say 3% interest on your savings and inflation is say running at 4%..... you are losing money.

That's undoubtedly a valid point in general, but a bizarre time to make it, since the gap between interest rates and inflation is probably wider than it's been for years just now (in the saver's favour), i.e. CPI at 1.7% with 5ish% still readily available!

friolento

May be it is with reference to this?

eskbanker

If savings rates had just recently bumped up to 5% territory then yes, that would be a timely warning....

friolento

eskbanker said:

If savings rates had just recently bumped up to 5% territory then yes, that would be a timely warning....

I can't comment on what ML really said but I know that various 'news' outlets are regularly publishing 'warnings' he allegedly issued. These pop up randomly in my browser, and I generally now don't read past the headline of such articles because I haven't yet learned anything new in any of them. If however they reach people with information they have previously been unware of, that's good. I just wish the writers would refrain from using dramatic language like 'warnings' and 'alerts' as they could cause anxiety.

friolento

johnaka said:

if anyone has more than 10 grand in there's saving to which I have.
what is martin lewis on about we could lose money. is he talking about interest? also he mentions that we could owe tax.how the heck does he make that out?
oh and I'm a pensioner. 73 yrs old

@johnaka As long as you have your savings in FSCS-protected accounts, and not more than £85,000 with any single financial institution, you won't be losing capital. Your money might lose buying power if your interest rate(s) is lower than inflation, but presumably you know that.

Depending on your income tax band, your total income, and your type of savings account, you may have to pay income tax on some of your savings interest. There are several MSE articles which should make things clearer for you:

https://www.moneysavingexpert.com/savings/personal-savings-allowance/

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

Please come back if you have questions left after reading these.

Eco_Miser

eskbanker said:

HumberFlyer said:

wasn't he referring to if you are getting say 3% interest on your savings and inflation is say running at 4%..... you are losing money.

That's undoubtedly a valid point in general, but a bizarre time to make it, since the gap between interest rates and inflation is probably wider than it's been for years just now (in the saver's favour), i.e. CPI at 1.7% with 5ish% still readily available!

If I'm remembering right, he was saying that right now, savings accounts really are savings accounts, not losing accounts, as they have been.

In reality all your money is losing spending power over time, the question is how much the interest, dividends, and capital growth is offsetting that.

Beddie

You have nothing to worry about unless you are a higher rate taxpayer, in which case you might pay some tax on interest. I'm assuming that will not apply to you.