INTERESTED IN HIGHER INTEREST ACCOUNTS?

TODAY’S BLOG

ARE YOU MORE INTERESTED?

The last year or so has seen enormous improvements in technology. Thankfully the money management technology is one of those elements that has improved.

Hunting for a decent interest rate is hard enough at the moment, but moving to a new better account once the rate has come to an end is a constant frustration due to the effort required and all the hurdles of proving your identity. As a result, most savers languish in poor accounts, earning next to diddly squat.

If you consider that your savings at a UK Bank or Building Society is only protected to the first £85,000 under FSCS rules, then balances that are larger give some concern, particularly when life feels somewhat uncertain.

MAKING MONEY MANAGEMENT EASIER

I’m pleased to announce that we have teamed up with Akoni, one of several cash management providers. They have branded the site with our logo – its their kit and service. I decided to remove any payments that we might get to your advantage. This is very self-service, but we can assist if you get stuck.

There are other solutions, this is aimed at those with cash savings of more than £85,000 – so not for everyone, but you can get rates of interest that others with much larger balances enjoy.

The aim of all these services is to make life easier for you, getting you better rates of interest. Its not free, no bank provides a free service (think about it – or ask if you still don’t understand). The Cash Management service company (Akoni in this instance) make a small charge which I believe is worth paying for the convenience.

Have a look for yourself by clicking this link.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

INTERESTED IN HIGHER INTEREST ACCOUNTS?2025-01-21T16:39:48+00:00

If you are 68 or older – The Pensioner Bond

The Pensioner Bond

You might remember that when he was Chancellor, George Osborne announced the Pensioner Bond in December 2014 as a way of trying to offer some comfort to savers who were experiencing very low rates of interest on their savings. You may recall that the two new Bonds were to be made available from January 2015 to those aged 65 or over and hence called “Pensioner Bonds”.

Over £1bn was squirrelled away by savers, earning interest of up to 4% over 3 years. On Monday the 3-year bond, officially matures. NS&I will write to all those with holdings, offering the Guaranteed Growth Bond which currently pays 2.2%, which is clearly below the rate of inflation. The account also ties the savings up for another 3 years or suffer 90 days lost interest penalty (about 0.55%) if withdrawn early.

Not as good, but still better

Those that used the full £10,000 allowance will have about £11,300 to re-invest from Monday. Clearly the fact that the rate is lower than inflation makes it a poor choice as a long-term strategy, however if it is simply a cash buffer, it is hard to beat even 2.2% over 3 years in a very low risk cash account. By comparison you would need to consider a 3-year Fixed Rate Bond that pays interest at maturity. Whilst a couple of Banks come close to 2.2% most are generally much lower, even the 5-year Bonds are generally paying less or only a fraction more.

So, if you can accept the below inflation rate and a tie-in for 3 years, then the offer from NS&I looks attractive. Be warned, (£1bn attracts all sorts of scams and misleading products) there will likely be lots of adverts in the press or online or directly into your inbox, promising something much higher, but it certainly will not be on a like for like basis and highly likely to carry additional risk, which you would need to fully understand; and if you can live with the higher risk, it would rather beg the question, why not simply use a regular investment? One that we can implement, manage and monitor for you.

A bit extra

Important point – The NS&I Guaranteed Bond normally has a maximum of £3000, if you hold the Pensioner Bond you will be able to roll over all the proceeds from your existing Bond, which as stated earlier could be as much as £11,300. If this is your intention, you don’t need to do anything at all, NS&I will automatically do this unless you tell them otherwise.

Here is a link (yes click this sentence) to the document that NS&I will be mailing to you.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

If you are 68 or older – The Pensioner Bond2023-12-01T12:18:19+00:00

What is the tax free Savings Income band?

What is the tax free savings income band?

You may have heard about the new tax free savings income band – in that the first £5,000 of interest is tax free from April 2015. Well it is and it isn’t… sadly it is another example of something that is true, but not true for many…. or another example of smoke and mirrors exemplified in Budget announcements.

With effect from 6th April 2015 the 10% starting rate of tax for savings income was replaced by a new 0% rate and the band increased from £2,880 to £5,000. This means that, in 2015/16, those with a total income of less than £15,600 (£10,600 personal allowance for 2015/16 plus the new 0% starting rate band) will pay no tax on their savings (the total income figure is £15,660 for those born before 6th April 1938).

Here is the smoke and mirror bit…

Non-savings income (i.e. earned income and pension income) is always taxed before savings income so the new tax -free £5,000 starting rate band can only apply to those earning less than the total of their personal allowance and the 0% starting rate band. In short, if you have taxable income under £15,000 from all sources, then you gain this allowance, but not if you have earned income – which could come from a pension.

Reclaiming Forms

The rules around completion of form R85 are changing from 6th April so that any saver who is unlikely to be liable to tax on any of their savings income (until now it has been total income) in the tax year can complete an R85 (one form for each bank/building society) and register to receive interest without tax deducted – even if they pay tax on other (non-savings) income. Click here to see the R85 forms.

Where tax is likely to be due on some savings income (for example, earned income is £12,000 and savings income is £4,000 meaning that £400 of savings income is taxable) a form R85 can’t be completed. The overpaid tax (i.e. up to the overall £15,600 threshold) will have to be claimed back from HMRC using form R40 or under self-assessment. Click here for an R40 form.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

What is the tax free Savings Income band?2023-12-01T12:20:11+00:00
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