I have some money, what will Lloyds offer me?

Newbie_John

You need to share more info really.
When will you need the money etc.

If you want to avoid paying tax, 100% safe and interest rate as high as possible then gilts sound like the best choice. The best rates start for 10+ ones, or even 5.3% for 20 years 

lr1277

Talking of tax, in my view HMRC are currently aggressively collecting tax at source for untaxed income.

Say you have more than !k in savings interest, your bank/building society sends your interest figures to HMRC

If you have income taxed at source like salary/pension, then HMRC will change your tax code so that you pay more tax from your earned income. My mum (on a pension) had 3-4 tax code change notices in the space of 2 months, with each tax code change leading to a bigger chunk of her pension being taken in tax.

Also if you earn more than £10k interest in savings a year, you have to submit a self-assessment return.

This doesn't mean you shouldn't seek out the highest paying accounts, just be aware of some of the ramifications.

Ayr_Rage

@lr1277, rubbish, HMRC aren't doing anything aggressively, they are just doing their normal thing.

With fiscal drag, higher interest rates and increases in wages and pensions more people are having to pay tax on savings income.

Also banks and building societies etc report ALL interest, not just amounts over £1000.

DRS1

Newbie_John said:

You need to share more info really.
When will you need the money etc.

If you want to avoid paying tax, 100% safe and interest rate as high as possible then gilts sound like the best choice. The best rates start for 10+ ones, or even 5.3% for 20 years 

On gilts if you are buying them outside an ISA (or pension) you want to go for low coupon gilts.  The coupons are taxed just like interest so if you went for something like TR43 you will find that most of that 5.3% is subject to income tax.

If you have not subscribed for an ISA then you probably should.  If you have £200k sitting in a savings account paying 5% you will get £10k of interest.  Now you may be one of those people who can receive £10k of savings interest and not pay any tax on it but if not then putting as much as you can in a tax shelter makes sense.

Kim_13

Ayr_Rage said:

@lr1277, rubbish, HMRC aren't doing anything aggressively, they are just doing their normal thing.

With fiscal drag, higher interest rates and increases in wages and pensions more people are having to pay tax on savings income.

Also banks and building societies etc report ALL interest, not just amounts over £1000.

They could find better ways of estimating what somebody’s earned interest will be, e.g. there must be a figure for how much higher/lower interest rates are on average in the current year than the last year they have reported figures for. Apply that adjustment rather than assuming that the same interest will be earned year after year and adjusting a person’s tax code on that basis. 

I do think there should be a limit to how many changes of tax code people should have to put up with when HMRC aren’t even working with actual  figures to calculate them. They must be a pain for employers also if they’re happening often for the same employee. If I ever owed tax I’d rather a letter that said pay us this amount by this date to avoid a change of coding to xxxx to collect this, or send evidence in one of the following ways if you think this figure is wrong. I certainly don’t want my code changing when I know I won’t owe any tax on my interest, as they did last year.

It would be simpler if they just collected tax a year in arrears, based on actual figures. By taking an estimate of the current year as well they effectively want the tax before you’ve earned the interest. Interest payments aren’t regular in the way that earned income is. Perhaps it would be better if a taxpayer could, once they knew they’d used up their PSA/savings allowances, ask their providers to deduct tax for the remainder of the FY - similar to the old submit a form to tell them you won’t need to pay any tax and to pay the interest gross.

LHW99

Perhaps it would be better if a taxpayer could, once they knew they’d used up their PSA/savings allowances, ask their providers to deduct tax for the remainder of the FY - similar to the old submit a form to tell them you won’t need to pay any tax and to pay the interest gross.

Once upon a time basic rate tax was deducted from all savings account interest. You could either claim it back from HMRC, or as said, fill in a form to tell the provider you were not subject to tax,

GeoffTF

Kim_13 said:

They could find better ways of estimating what somebody’s earned interest will be, e.g. there must be a figure for how much higher/lower interest rates are on average in the current year than the last year they have reported figures for. Apply that adjustment rather than assuming that the same interest will be earned year after year and adjusting a person’s tax code on that basis. 

I do think there should be a limit to how many changes of tax code people should have to put up with when HMRC aren’t even working with actual  figures to calculate them. They must be a pain for employers also if they’re happening often for the same employee. If I ever owed tax I’d rather a letter that said pay us this amount by this date to avoid a change of coding to xxxx to collect this, or send evidence in one of the following ways if you think this figure is wrong. I certainly don’t want my code changing when I know I won’t owe any tax on my interest, as they did last year.

It would be simpler if they just collected tax a year in arrears, based on actual figures. By taking an estimate of the current year as well they effectively want the tax before you’ve earned the interest. Interest payments aren’t regular in the way that earned income is. Perhaps it would be better if a taxpayer could, once they knew they’d used up their PSA/savings allowances, ask their providers to deduct tax for the remainder of the FY - similar to the old submit a form to tell them you won’t need to pay any tax and to pay the interest gross.

You can pay tax on interest by Self Assessment rather than PAYE. If the interest is less than 20% of your income (actually "relevant amount"), you can pay in arrears, otherwise HMRC will require Payments on Account. You will find the details of how Payments on Account work here:

https://www.gov.uk/hmrc-internal-manuals/self-assessment-legal-framework/salf303

You can apply to have Payments on Account reduced if your income is going to be lower in the next tax year.

jimjames

GrubbyGirl_2 said:

Lloyds will want to get you into investing.  I am constantly getting messages from them trying to arrange a meeting.

They now have a partnership with Schroders called Scottish Widows Schroders Personal Wealth and seem to be pushing it quite hard as a service

vacheron

Section62 said:

snickpan said:

Just sold a house, Lloyds bank offered to have their team meet me next week (online) with options for £200k.  Their savings rates are pisspoor compared to other places, will they pull something out of the bag?  In the meantime, I've opened an ISA with Tembo, and a '5% for a year' savings account with Chase

If you mean 'will they offer me an exclusive savings product with a higher interest rate?' then the answer almost certainly is "no".

What they are more likely to do is steer you to one of their paid for investment services.

This!  /|\ 

They are a business at the end of the day, and there is no money to be made in offering people high rates of interest, but plenty in recommended advisor fees, trading charges and their "specially selected managed funds" with 2-3% AMC's!

I would still attend as there is only a few minutes of your time to lose, and if you do, please do report back and let us know what their angle was.