Savings Interest

[Davemano]

Got a letter from TSB to say that as from 6th April 2016 bank and building society customers will ne longer be taxed on the first £1.00O of interest earned (£500 for higher tax rate payers) I don't keep up with the news too much so this was something which I hadn't expected.

[fiction-factory]

It was announced in the last budget but one I recall

[sandyRoe]

You'd need a fortune on deposit to earn interest totalling £1000.

[fiction-factory]

It is good news, although with interest rates so low it won't make much difference unless you have a largish level of savings

[Davemano]

Yes Sandy but at least you will save 20% of any interest which you accrue.
ff - Yes, but it was something I'd missed.

[Gizmonster]

If you can get an account that pays 2% interest (wishful thinking??), then a basic rate taxpayer would need around £50,000 in the account to earn the full £1,000 tax-free benefit.
Most people prob won't be paying tax on interest on savings .......

[Davemano]

Gizmonster - that's not quite true as ANY interest you make has already had the tax deducted by the bank.

[ubasses]

Gizmonster is referring to interest from April 2016, you will also be able to get the first £5000 of dividend income tax free as well.

[Davemano]

Ubasses - I was going purely on Gizmonster's last line because any interest accrued before April is taxed, provided they are a taxpayer.

[Gizmonster]

To clear things up:

After April 2016, most people prob won't be paying tax on interest on savings ....... :)

[Old_Geezer]

Don't think my skinflint bank has paid interest on my current account for years. So I'm safe.

[fiction-factory]

Santander123 pay 3% if you have £3000 (I think)to £20000 in. Tesco pay me 3% on up to £3000. A few regular saver accounts pay 5-6%. I understand Lloyds were paying 5% on the first few thousand.
The accounts are there but you have to do quite a bit of messing around to meet the account conditionsand spread your money around.

[VHG]

I get 3% on my £25,000 in my Santander current account AND they pay me money for every direct debit I have to pay Gas, Electricity etc.

There is a monthly fee (it was £2 but has just gone up) but I still get about £50 or £60 interest each month.

[fiction-factory]

same for me, VHG- Santander 123 is good- although interest is paid only on the first £20000

[Davemano]

Same for me, but the monthly administration fee increased from £2 to £5 on 16th January.

[hc4361]

That £50 - £60 interest each month will be a little bit more without the tax taken off :)