Savings rates
With the change to banks and building societies now paying interest 'gross' rather than 'net' i.e. with no deduction for tax, under the new tax rules.......has anyone else noticed that the meagre percentage paid has remained the same?
In other words, they have simply pocketed the tax that they used to deduct.
Halifax Bank have done this and I'm sure there will be others.
Comments
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No...what I meant was, if the interest rate was, for example, 1.6% nett (2% gross) previously, we are now finding that it's 1.6% gross that they are paying.
Not had that - YET! Did have letter from Nationwide to say ISA rate dropping from 1.4% to 1% on an existing one. More work to look and see if anyone offering better on transfers in . Also got a fixed term ISA maturing at tne end of June so more homework!
Nearly a fulktime job trying to be an interest rate tart Got to watch tax situation already doing calculations as have accounts paying 5% and 3%. Got to shift some into ISA for this year, not cos the rates are better than I'm getting but to cut tax liability
. Hoping not to get into tax form filling and additional PAYE calculated by the tax office on money it assumes I haven't spent once banks/building societies have told them the amount of interest paid to me in the previous tax year.Can't see interest rates rising in the near or perhaps distant future . I'd love what my in-laws and parents had we were paying 17% interest on our mortgage
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Invest some of your money in Premium bonds. No you don't get interest but with the steady winnings your annual savings increase by more than they would in a Building society. Even winning between £25 - £75 every month is better. Never had a big win but regular small amounts are very welcome.
K
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Kennine lady luck must smile on you more often than us. We have a couple of blocks and have never had a sniff. Maybe worth a thought tho as you say doesn't attract interest and you can take out exactly what you put in.
Always food for thought on this forum. Financial advice is not covered by any guarantees
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Invest some of your money in Premium bonds. No you don't get interest but with the steady winnings your annual savings increase by more than they would in a Building society. Even winning between £25 - £75 every month is better. Never had a big win but
regular small amounts are very welcome.K
Ditto K, think I made 2.5 percent last year. Of course that does not mean the same for this year but what the hell you cannot do any better anywhere else.
peedee
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Here's another example......if you have a Halifax Rewards account, you'll know that they pay £5 per month as a 'reward'.
You should also be aware that, at the end of the tax year, they send you a statement (a sort of P60) showing how much interest you've been paid. Last year, this showed a gross payment of £75 and a net payment of £60 (i.e. your £5 per month). So they were
really paying you £6.25 per month less 20% tax, giving you the £5 per month net payment.In the current tax year, all payments should be made gross i.e. with no tax deducted. But they are still paying £5 per month.
We queried this at a Halifax branch today and they tried to tell us that the payment is a 'reward' and not interest. This is patently nonsence, as demonstrated by the tax statements that they send out.
We intend to query this with Halifax, but I suspect they will say that they are now paying £5 gross per month.......i.e. only £4 per month net.
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Mrs H rang them today and they told her that they are paying £5 per month net......despite the new rules that say that they have to pay interest gross.
Maybe they just don't want to change all their adverts and leaflets saying that they pay £5 per month? Even if it means breaking HMRC rules.
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Hmmm hadn't considered 'cash back' from Santander as interest. This comes on top of 3% interest on balances £3,000 - £20,000. Mind you there is a £5 charge per month which we've just about covered by cash back. It seems that trying to get a decent interest
rate needs far more consideration than just the intetest rate! Its a real minefield with gross interest - the law if unintended consequence . Hopefully Money Box or Martin's Money Tips will enlighten us in the near future. Must dig out our statement and
check the wording.0 -
Sorry Peedee you can do better - although there is a risk attached. I did better over last 12 months by investing in a stocks and shares ISA, so far paid for a new (to me) tow car.
But risk isn't for everyone and I respect those who make a decision based on their knowledge and needs rather than mine.
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We have a savings bond with Nationwide which pays monthly interet and checking this month's bank statement it does appear to have been paid correctly (ie gross). No problem there then. But what does concern me slightly is that are we all now expected to
write to HMRC at the end of each year giving details of our untaxed interest earned? As I understand it, each individual has an allowance of £1000. Are they just going to take it on trust or do we all have to report it now?0 -
Sorry Peedee you can do better - although there is a risk attached. I did better over last 12 months by investing in a stocks and shares ISA, so far paid for a new (to me) tow car.
Ah but what are your chances of winning a million. I might only have a very very small chance but at least I have one.
peedee
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Here's another example......if you have a Halifax Rewards account, you'll know that they pay £5 per month as a 'reward'.
You should also be aware that, at the end of the tax year, they send you a statement (a sort of P60) showing how much interest you've been paid. Last year, this showed a gross payment of £75 and a net payment of £60 (i.e. your £5 per month). So they were
really paying you £6.25 per month less 20% tax, giving you the £5 per month net payment.In the current tax year, all payments should be made gross i.e. with no tax deducted. But they are still paying £5 per month.
We queried this at a Halifax branch today and they tried to tell us that the payment is a 'reward' and not interest. This is patently nonsence, as demonstrated by the tax statements that they send out.
We intend to query this with Halifax, but I suspect they will say that they are now paying £5 gross per month.......i.e. only £4 per month net.
The "Reward" is an odd thing, but apparently they are correct in saying it is not interest, it's been discussed on several forums. So it looks like we will all just have to claim back the tax deducted later.
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But the fact that we can claim it back must mean that it's interest under HMRC rules.......otherwise HMRC wouldn't pay it back as interest.
Also, Halifax send you a statement showing it as interest.
I think they are stretching a point to save re-printing their literature.
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