How does this work?

Fatman

Got this random email today concerning this savings account:

http://www.scottishfriendly.co.uk/regular/

They reckon that I dont pay tax on the first £25 a month.
Ive never heard of this before - Is this a good deal, or does this sound a bit dodgy?

dunstonh

They reckon that I dont pay tax on the first £25 a month.

That is correct. Friendly societies (which are mostly Scottish) still get a small tax free allowance given to them. It should have been abolished years ago but our Scottish leaders may have an interest in keeping it going

does this sound a bit dodgy?

its not dodgy.

Is this a good deal

Usually not no. The charges on these plans usually come from yesteryear and are signficantly higher than unit trusts (which is what you typically use after your £7200 ISA allowance is gone). It means the tax free status is largely worthless