The Top Regular Savers Discussion Thread

GetRichOrDieSaving

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. 

clairec666

If like me you're unlikely to max out your ISA each year, and are a basic rate taxpayer, then regular savers will usually give you the best return. 5% regular saver minus tax will be equivalent to 4% in an ISA.

Only downsides are:
Having to check that your tax code has been calculated correctly (I'm thinking of situations like Zopa incorrectly reporting ISA interest as taxable, etc.)
If your situation changes in a few years, or if ISA deposits are slashed, then you might regret not getting more of your cash inside a tax wrapper sooner.

Bridlington1 said:

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.

In the last year or so, cash ISA rates have generally fallen in line with the base rate, but regular saver offerings have still been pretty good - there's still a healthy selection of 7% accounts, and plenty of choice above 5.5% (my current cut-off point).

I'm anticipating that regular saver rates will fall over the next year, but I imagine there will still be plenty which outperform ISAs.

GetRichOrDieSaving

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.

Yes I can see that a baseline of having 6% and 4.8% rates as a good way of indicating the best accounts to use currently and using that 20% reduction going forward. I’m certainly not getting a 4.8% ISA any time soon so my minimum 6% RS funding is bang on the money it seems. I currently don’t fund anything less than 6% due to availability of funds but this is a good way of working out the minimum percentage funding rates, thank you. 

GetRichOrDieSaving

clairec666 said:

If like me you're unlikely to max out your ISA each year, and are a basic rate taxpayer, then regular savers will usually give you the best return. 5% regular saver minus tax will be equivalent to 4% in an ISA (as emergency fund & everyday money).

Only downsides are:
Having to check that your tax code has been calculated correctly (I'm thinking of situations like Zopa incorrectly reporting ISA interest as taxable, etc.)
If your situation changes in a few years, or if ISA deposits are slashed, then you might regret not getting more of your cash inside a tax wrapper sooner.

I don’t max out my ISA allowance, instead I pay off my 10% penalty free mortgage allowance per annum and the rest revolves around maintaining continuous RS and having spare cash in an EA ISA. 

I don’t think I would want to peruse if HMRC have correctly calculated my tax, similar to me not wanting to calculate it myself in the first place. The difference would likely not be worth my time if incorrect. I only owe £120 anyway.

Thanks for the reply.

Hattie627

If you possibly can, I would fully fund an ISA every year before looking at any other type of cash saving vehicle, other than somewhere to keep your emergency fund, Once your money is in an ISA it remains tax free until you pull it out (or die, and even then your spouse can "inherit" the tax-free aspect of that money). By subscribing the full amount each year (or as much as you can short of that) you will build up over the years a substantial tax -free stash of money which (believe me) will stand you in good stead in retirement years (ideally in addition to pension savings),  Once your ISA cash savings have built up over a few years,  you could move all (or part of them if you want to keep some ISA cash as a security blanket) into a stocks and shares ISA for greater potential growth (you can choose your level of risk, depending on your age and time horizon). Only once you have filled your cash ISA allowance for the year, and kept your emergency non ISA cash savings topped up to whatever level you are comfortable with (bearing in mind you want to avoid having to dip into your ISA cash savings for emergencies like home repairs and the like) should you be looking at other non ISA cash savings (eg regular savers). 

flaneurs_lobster

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?

GetRichOrDieSaving

Hattie627 said:

If you possibly can, I would fully fund an ISA every year before looking at any other type of cash saving vehicle, other than somewhere to keep your emergency fund, Once your money is in an ISA it remains tax free until you pull it out (or die, and even then your spouse can "inherit" the tax-free aspect of that money). By subscribing the full amount each year (or as much as you can short of that) you will build up over the years a substantial tax -free stash of money which (believe me) will stand you in good stead in retirement years (ideally in addition to pension savings),  Once your ISA cash savings have built up over a few years,  you could move all (or part of them if you want to keep some ISA cash as a security blanket) into a stocks and shares ISA for greater potential growth (you can choose your level of risk, depending on your age and time horizon). Only once you have filled your cash ISA allowance for the year, and kept your emergency non ISA cash savings topped up to whatever level you are comfortable with (bearing in mind you want to avoid having to dip into your ISA cash savings for emergencies like home repairs and the like) should you be looking at other non ISA cash savings (eg regular savers). 

Thank you for taking the time to respond to my post, however I’m not after general financial advice. I understand the benefits of long term cash ISA savings and tax benefits on large amounts but that isn’t what I’m trying to achieve at this moment in time. I’m currently aiming for financial security through overpaying on mortgage repayments so that I can own the house outright before investing the difference in S&S ISA. I also want to own the house outright within the next 10 years prior to a move to Australia, so want to either sell the house and receive full funds before leaving, or keep it as a rental and additional income to help support a new life in Aus. 

I do also currently dabble in a S&S isa with just a few thousand just to get my eye in and learn trends etc. 

Hattie627

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?

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. 

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'm on self-assessment so I keep a record of every interest credit. When an account matures (or otherwise credits interest)  I enter the details into my record table. (I'm no use with spreadsheets, my bad). Takes seconds. Then I add up the figures at the end of the tax year to get a total for "untaxed UK interest" to enter on SA return (that maybe takes 10 minutes) 

jaypers

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 do Self Assessment and yes, I keep a spreadsheet that I update throughout the year as I receive interest. If you do it on an ongoing basis it isn’t as bad as it sounds. After the end of the year, I do usually cross reference my calculations with the statements provided from each institution too, but the advantage of having the spreadsheet is that you have everything in one place and know that nothing is missed.

friolento

Hattie627 said:

If you possibly can, I would fully fund an ISA every year before looking at any other type of cash saving vehicle, other than somewhere to keep your emergency fund, Once your money is in an ISA it remains tax free until you pull it out (or die, and even then your spouse can "inherit" the tax-free aspect of that money). By subscribing the full amount each year (or as much as you can short of that) you will build up over the years a substantial tax -free stash of money which (believe me) will stand you in good stead in retirement years (ideally in addition to pension savings),  Once your ISA cash savings have built up over a few years,  you could move all (or part of them if you want to keep some ISA cash as a security blanket) into a stocks and shares ISA for greater potential growth (you can choose your level of risk, depending on your age and time horizon). Only once you have filled your cash ISA allowance for the year, and kept your emergency non ISA cash savings topped up to whatever level you are comfortable with (bearing in mind you want to avoid having to dip into your ISA cash savings for emergencies like home repairs and the like) should you be looking at other non ISA cash savings (eg regular savers). 

I agree that people should assess whether a longer than current tax year view would be appropriate for them. Not least in the light of the forthcoming cut in cash ISA limits, which may be of particular relevance to people who are building up a cash balance for use in the medium term, e.g. for a deposit for a house or university fees. Depending on personal circumstances, other options (LISA, overpaying mortgage, saving in spouse’s name, use of savings starter rate, pension rather than savings etc) might be relevant. A lot also depends on the total amount of funds available - if you can service all the regular savers and still have up to £20k spare, using an ISA  could be a no-brainer. A flexible ISA might also play a role. 

I also agree that the Regular Saver thread isn’t the best place for discussing tax saving strategies.