Interest Rates

[Maydup]

Is 4.75% a good rate for savings at the moment? Should I fix at that or keep looking around?

[barry1010]

We both win on the PBs 10 months out of 12, no really big win yet though.

I didn't want to fix for more than a year but I might regret that.

[ZebuSanctuary]

PB wins are free of tax. What are the tax implications on fixed rate investments. Is it still £2k interest earned in any one year free of tax?

[davebro]

it's only £1000 per individual I think

[davebro]

basic rate taxpayers (20%) can earn £1,000 in tax-free interest each year
higher rate taxpayers (40%) can earn £500 in tax-free interest each year
additional rate taxpayers (45%) don’t get an allowance

[davebro]

If you might only earn a little over the (£1000) savings allowance is it really worth getting involved with HMRC and having to complete a self-assessment tax return or maybe hust keep under the 1000.

Incidentally the PBs max has been at the same figure since 2015. If the limit was raised it would pull more money into PBs which are a cheap form of borrowing for the government.

[ZebuSanctuary]

Thanks for that Dave.

Given that information then, in the current financial climate I would personally seek to invest in a one year fixed rate investment at 4% plus, as opposed to PBs.

[ZebuSanctuary]

// is it really worth getting involved with HMRC and having to complete a self-assessment //

I take your point.

However these days they're not so daunting! With highlighted headers and step by step guidance they are not the confounded war and peace manuscripts of yesteryear.

[youngmafbog]

For those of us with no allowance any current interest rate is miserly.
Better to invest in the market while it is down.

[davebro]

I really don't want to invest any more - I want to SPEND, SPEND, SPEND! (but I don't know how)

[geevo41]

If you earn less than £12570 this year in non interest income you can receive an extra £5000 on savings interest tax free. Every pound you earn over the basic tax allowance reduces the extra allowance by £1.
You can also transfer 10% of your tax allowance to your spouse if one partner is not using all their allowance.

[ZebuSanctuary]

//SPEND, SPEND, SPEND!(but I don't know how)//

LOL... Unfortunately the late Viv Nicholson is no longer around to ask.

[ToraToraTora]

"I have Premium Bonds and have won £50 in 60 years! It doesnt appeal to me to buy more, but it must be my turn for a big win soon! " - well you need more than £20 worth. I win 8 months out of 12. usually a small prize but I live in hope.

[ZebuSanctuary]

>09.03 Thanks for the info!

Part of me wants to say, this is rather generous! However to take advantage of this offer one needs a considerable amount of savings.

It is likely those earning less than £12,570 would not have at their disposal the monies to invest to capitalise on this.

[Maydup]

I’m not earning anything but drawing on investments so I am very tax conscious. I would like to see the money grow rather than wait for a bit of luck from PBs but this is cash savings rather than investments.

[Maydup]

TTT - you say you win often, but what is your actual rate of return on PBS ?

[ToraToraTora]

currently 2.2% but I'm not saying it's a better return, I'm saying you get very little anyway and you tie up your dosh for 3 years. With PB you get instant access some prizes but, crucially a no risk chance of a bigger prize.

[youngmafbog]

My rate of return on PB's is zilch.

Not had a penny in years. I think there is only about £1000 in there, must go and look it up I suppose.

[ToraToraTora]

in 3 years for £1000 you'll make £150. Now I agree if you are putting in millions but they'll have a ceiling.