Impact of higher tax rate on savings

eskbanker

millymollymandy73 said:

So is it generally the case that any money that would take me over the £500 in interest personal savings allowance is better off being placed in an ISA? ie. Would earn more money that way than a regular saver?

You'd need to compare the relative net interest rates, i.e. 60% of the regular saver rate versus the stated ISA one - generally best to aim to maximise net return than simply to avoid tax, as they don't always give the same answer!

Yorkie1

millymollymandy73 said:

So is it generally the case that any money that would take me over the £500 in interest personal savings allowance is better off being placed in an ISA? ie. Would earn more money that way than a regular saver?

Generally yes, but to be sure you'd need to compare the ISA rate against the post-tax regular saver rate.

For example, 1% in an ISA would leave you worse off than a 10% regular saver, even if the interest from the regular saver was taxed at 40%.