The Top Regular Savers Discussion Thread

easysaver

The discussion on maxing out regular savers and/or contributing to ISAs really highlights that circumstances really are everything.

My immediate thoughts were along the lines of ISAs are use it or lose it. In an ideal world you'd use a flexible ISA to fund regular savers and replenish the ISA with funds just before the end of the tax year. However, that all pales into insignificance when you consider ISAs are no longer tax free when emigrating (save a few tax havens). If that were my plan I'd only consider ISAs as short term.

clairec666

Kim_13 said:

If I ran out of other allowances and the difference between an ISA and an RS was fractions of a percent, I’d take the ISA knowing that would be tax free year after year.

I take that approach too - I'll favour an ISA rather than a 5.5% regular saver even though I'll get slightly less interest in the ISA. It's a case of "use it or lose it" with the ISA allowance.

Unfortunately my RS maturity dates don't work out well for using this year's ISA allowance - quite a few maturing in late April - May. Considering withdrawing / refreshing at the end of March - will weigh up my options nearer the time.

clairec666

Section62 said:

Part of my RS planning is to have maturities (and/or RS accounts which can be closed early) in late March/early April in order to replenish my cash ISAs before 5th April.  On the 6th, the cash ISA is raided to make the April payments for all my RS accounts which don't have fixed deposit dates.

I'm relatively new to this game so failed to forward plan effectively.... only a lone Principality maturing in March, then a whole run of maturities from late April through to June. And not many good candidates for closing early - First Direct (rubbish rate if you close early), Virgin (no replacement on offer), Zopa (fixed rate, better than current offering), two more Principalities (wouldn't be able to replace them, due to multiples of the same issue) and Cooperative.

surreysaver

I have a flexible offset mortgage, so what I've been doing is withdrawing from that at the end of each tax year to fully fund cash ISAs in order to protect my limits, then putting the money back into the mortgage at the beginning of the new tax year.
Prior to COVID, it was worth me taking money out of the mortgage to put into regular savers, but at 4.75% (it's a base rate tracker), it's not currently worth it as I've enough cash to cover the higher rate regular savers 

gt94sss2

flaneurs_lobster said:

GetRichOrDieSaving said:

Bridlington1 said:

GetRichOrDieSaving said:

This comment isn’t in relation to any specific RS but I do contribute to around 15-20 regular savers as result of this thread monthly and it is linked directly to this.

I recently had my tax code altered (I’m a 20% tax payer, so £1000 tax free amount) because I exceeded my personal interest tax allowance which is fine, I understand why.  

Now like most of us I do chase the higest rates and jump through hoops to achieve these, but I don’t calculate my expected interest or even keep track of it. I just take it, leave, or renew onto the next issue etc. Due to my lackadaisical attitude I’ve always just assumed that paying 20% on interest if I did exceed the personal tax allowance would most likely work out better for me financially regardless in the long run. That’s based on having regular savers of 6%+ per year over lesser paying ISAs (currently with T212 at 4.05%). I’m currently contributing £4,200 monthly to RS. 

Now I know many others in this thread have large monthly contributions to RS and I’m ware that most likely run a tighter ship, but do you share the same assumption about paying the tax on interest? 

I also anticipate that as the RS rates naturally descrese overtime in line with BOE rates that I will eventually drop back under £1000 interest. 

I currently do not max out my ISA contributions and instead use this for everyday finances and spare money £1,000- £3,000 at any given time, which is why I have the T212 easy access S&S ISA. My current strategy (which I’m happy with) is saving in RS’s for 12 mornths, then paying off my annual 10% mortgage allowance in December, so don’t carry to much money over per annum. 

I generally take the approach that I'll stick my money wherever it earns the most interest (post tax) at the time, I'd rather fund a 6% RS than a 4% ISA at the moment on the grounds that even getting taxed on the interest on a 6% RS still leaves me (as a 20% taxpayer) with more money overall than a 4% ISA would.

I still keep track of how much interest I earn, but I'm a fair bit over the PSA at the moment so for me it's mainly the interest rates on cash ISAs vs regular savers I look at, especially now that I've got so much RS capacity at higher interest rates to the point it makes sense for me to pull money from ISAs to fund RSs.

Like yourself I'm assuming regular savers will slip back over the coming months, but I'm making the same assumption with variable ISA rates so it anything my collection of fixed rate RSs are probably going to take more of a priority for the next few months.

I've held back on funding some of my more ``borderline" RSs for this month owing to a shortage of available funds with a view to review the savings landscape more towards the end of the month.

A similar approach and attitude then, thanks for that. 

The high interest rates won’t be around for much longer and we have seen some chunky decreases in the past few months anyway so can only assume that my tax on interest problem will be somewhat short term. However they will rise again one day and I just want to make sure I have the right attitude towards it for my circumstances.

I appreciate the reply. 

Can I ask about people's record-keeping when it comes to interest income?

I have a nagging worry that I'm failing to keep sufficient detail at the account level, in fact I'm failing to keep any detail other than the Statements/Certificates issued by the providers after the year end. 

Is there any reason why I need to maintain a separate record of EVERY interest payment (monthly, annual)? 

Do others maintain a record of EVERY interest credit to their savings accounts or do you rely on your bank's statements/transaction listings?

I am in self assessment but don't keep a record of every single interest payment.

I have a list of all my regular savers including the maturity date and add the total interest paid that tax year (usually it's just one figure on maturity)

This makes it easy to check against annual statements/tax certificates and know how much I need to declare on my tax return. 

The only time I do something different is for multi year RS where I rely on the annual certificate and check it against how much was credited to the account.

Keeping the list in maturity date order also helps ensure that I don't "forget" a regular saver is maturing!

Bobblehat

Every penny of interest gets recorded in my spreadsheet every month, including an end-of-year column for 1st April to 5th April, by month for each account. The accounts are split into sections ... taxable interest/payments & non-taxable interest/payments. I even work out interest prediction figures(*) for future months and even for the next tax year if appropriate to the account. Actual interest figures are fill-coloured "green" when received (or confirmed as predicted) and "orange" for predictions. Anything amiss (or I miss  ) stands out well with this colour method and I can investigate when it's spotted. 

This gives me total interest figures by month, by tax year, and along with recorded starting balances and interest rates, a predicted end-of-year balance and predicted tax bill. In another worksheet, I record pension income, gross and net, and cross check the figures with the interest worksheet to see if I am paying close to the correct amount of tax .... and getting a good idea of how much I owe HMRC!

Why do I do this? It evolved along the years to help manage money flow as the number of accounts I have grew over those years .... currently ~60 accounts. It has come in very useful on more than one occasion when I have had to make inquiries with HMRC over differences between my figures and theirs, and when I had an unexpected pension underpayment paid out in one tax year, that covered payments from over 5-6 tax years! That was fun .... I'm glad I had detailed figures to back my tax refund claim!

(*) This sounds like a fair amount of work, but once set up, it's the spreadsheet formulae that do nearly all of the work for me each month and each year. I just have to enter, and/or just change the fill colour of, a few interest figures received each month. For reference, I also have the time to do it, having retired well over a decade ago!

PRAISETHESUN

flaneurs_lobster said:

GetRichOrDieSaving said:

Bridlington1 said:

GetRichOrDieSaving said:

This comment isn’t in relation to any specific RS but I do contribute to around 15-20 regular savers as result of this thread monthly and it is linked directly to this.

I recently had my tax code altered (I’m a 20% tax payer, so £1000 tax free amount) because I exceeded my personal interest tax allowance which is fine, I understand why.  

Now like most of us I do chase the higest rates and jump through hoops to achieve these, but I don’t calculate my expected interest or even keep track of it. I just take it, leave, or renew onto the next issue etc. Due to my lackadaisical attitude I’ve always just assumed that paying 20% on interest if I did exceed the personal tax allowance would most likely work out better for me financially regardless in the long run. That’s based on having regular savers of 6%+ per year over lesser paying ISAs (currently with T212 at 4.05%). I’m currently contributing £4,200 monthly to RS. 

Now I know many others in this thread have large monthly contributions to RS and I’m ware that most likely run a tighter ship, but do you share the same assumption about paying the tax on interest? 

I also anticipate that as the RS rates naturally descrese overtime in line with BOE rates that I will eventually drop back under £1000 interest. 

I currently do not max out my ISA contributions and instead use this for everyday finances and spare money £1,000- £3,000 at any given time, which is why I have the T212 easy access S&S ISA. My current strategy (which I’m happy with) is saving in RS’s for 12 mornths, then paying off my annual 10% mortgage allowance in December, so don’t carry to much money over per annum. 

I generally take the approach that I'll stick my money wherever it earns the most interest (post tax) at the time, I'd rather fund a 6% RS than a 4% ISA at the moment on the grounds that even getting taxed on the interest on a 6% RS still leaves me (as a 20% taxpayer) with more money overall than a 4% ISA would.

I still keep track of how much interest I earn, but I'm a fair bit over the PSA at the moment so for me it's mainly the interest rates on cash ISAs vs regular savers I look at, especially now that I've got so much RS capacity at higher interest rates to the point it makes sense for me to pull money from ISAs to fund RSs.

Like yourself I'm assuming regular savers will slip back over the coming months, but I'm making the same assumption with variable ISA rates so it anything my collection of fixed rate RSs are probably going to take more of a priority for the next few months.

I've held back on funding some of my more ``borderline" RSs for this month owing to a shortage of available funds with a view to review the savings landscape more towards the end of the month.

A similar approach and attitude then, thanks for that. 

The high interest rates won’t be around for much longer and we have seen some chunky decreases in the past few months anyway so can only assume that my tax on interest problem will be somewhat short term. However they will rise again one day and I just want to make sure I have the right attitude towards it for my circumstances.

I appreciate the reply. 

Can I ask about people's record-keeping when it comes to interest income?

I have a nagging worry that I'm failing to keep sufficient detail at the account level, in fact I'm failing to keep any detail other than the Statements/Certificates issued by the providers after the year end. 

I'm currently funding ~30 RS/mth with ~£8k/mth (this is not sustainable for much longer, ISAs are depleting..). Interest earnings are ~£5k/yr (according to HMRC).

Is there any reason why I need to maintain a separate record of EVERY interest payment (monthly, annual)? 

Reworking my spreadsheets to capture individual interest payments at the account level is a serious chunk of work and would be onerous to maintain unless I can rethink the layouts.

I read here of mistakes/omissions being made by the institutions in their annual reporting to HMRC, don't think these errors are endemic but is this sufficient reason to check my actuals against annual statements against HMRC's figures?

Do others maintain a record of EVERY interest credit to their savings accounts or do you rely on your bank's statements/transaction listings?

If HMRC were to decide that I needed to move to Self Assessment (there's no reason why they would at the moment) are my records sufficiently detailed to provide the data required?

I keep a record of all my interest in a spreadsheet and I sweep through my accounts every few months to gather up the figures. In my case I am required to do self assessment as I have some foreign tax obligations, which means that some payments might count towards two different tax years depending when they credited, so I need to know the exact dates and figures. My active records usually span across 18 months or so at any given time, but I also keep hold of the historical data in case I ever need it (in the cause of audits, etc). It also helps me keep track that my RS accounts are being funded correctly.

Kim_13

Kim_13 said:

Cambridge BS RS renewed today, also with the 32p glitch someone mentioned a while ago. It does tally with the interest added, they just sent 32p less than expected to my nominated account. Hopefully that’ll land early enough for me to be able to move some of it to RS on the weekend deposit list today.

Still no sign of it, so I’m guessing they don’t actually send on a weekend (unlike Principality who definitely have funds landing on a Saturday.) I usually try to avoid weekend maturities but since they allow the account to be renewed through maturity options rather than the faff of sending off for a replacement by post it makes more sense to do that.

Edit: Now showing to be credited tomorrow, so not even the 0.25% interest on £1,500 of it over the weekend (Nationwide FlexDirect past bonus period.) Sigh.

snow62

Similarly to above comments with Cash ISAs, I've always maxed out each year, sometimes not till the start of April to earn higher interest elsewhere.  Personal example why: after my father died and we sold the family home (of 50 years plus) I had a large sum which took a few years to transfer into ISAs.  If I hadn't maxed out in previous years, interest on the amount that hadn't previously gone into ISAs would have continued to be taxable year on year.

I've now occasionally been raiding the Cash ISAs to fund RSs, but next April I won't be funding RSs until 6th April rather than the start of the month.  I will also be putting everything I can back into flexible Cash ISA before the 5th, including e.g. contents of Santander Edge Saver.  I will then take back out what's needed for RSs and to refill Edge Saver on the 6th.  I may not be able to use the full Cash ISA allowance next year, but if I can this gives me extra flexibility, so to speak, moving forward.

As for tax on interest for RSs (and other accounts), like others I keep a spreadsheet going throughout the year, entering each interest payment as it happens.  This is split into current accounts, monthly interest accounts and annual interest accounts.  Keeping it up to date means that at the end of the year it takes me exactly zero seconds to work out the total to be entered on my tax return.

surreysaver

RG2015 said:

I look at the rates of non ISA interest and subtract 20%. For example 6% becomes 4.8%.

I then compare this with the best ISA rates. If I could get an ISA with a better rate I would choose this ahead of a 6% non ISA. At the moment I would not touch a 5% RS since 4% ISAs are readily available.

The effect of the PSA and non fixed rates are less easy to determine, but a cut off of 5.5% (eg NatWest and RBS RSs) is where I am currently.

Also, a dedicated thread would seem to be a good idea.

My cut off is 5.25% (Lloyds and Newcastle), although I'll open a 5% and minimally fund if it's fixed or an organisation I'm new to