Cash ISA Revival

[Spevs]

With interest rates on their way to 5%, will Cash ISA's become more appealing as anyone with over £20K in savings will be into tax at 20% for anything more than that.........?

[Carbon Sasquatch]

Likely yes, particularly as S&S investments look less attractive right now.

It's also worth knowing that low earners can receive more tax free interest - known as the starting rate. If your income < 17,570, then you can receive more tax free interest. It works on a taper, so if your income is 12,570 then you can receive 5k in tax free interest.

All our cash savings are in my (non-working) wife's name

https://www.gov.uk/apply-tax-free-interest-on-savi...

[FiF]

Yes, just been doing a review, and realised that will have to do some fast footwork to move stuff. Got lazy and just kept going for the %. Only today had more or less decided where to move some that had built up in a current account but not actually actioned anything yet, now need to think again.

[VR99]

For anyone who is more clued up than myself, are we permitted to use a combination of both a cash and S&SISA in a given tax year or is it one or the other as only 1 account is permitted per tax year?

I haven't used cash ISA's in many years, opting to use my S&SISA instead for the last couple of years, the idea that potentially we could receive a guaranteed 5% return (tax free) on a £20k balance in a cash ISA for the 23-24 tax year sounds quite appealing Vs the risk of Equities however no idea which will fare better next year.

[Ezra]

Even if we're heading to 5% on cash ISA's, its not where I'd be putting my money if inflation is 10%. Think I'm sticking with the S&S ISA route and likely heading in the direction of wealth preservation funds.

[vulture1]

Carbon Sasquatch said:

Likely yes, particularly as S&S investments look less attractive right now.

It's also worth knowing that low earners can receive more tax free interest - known as the starting rate. If your income < 17,570, then you can receive more tax free interest. It works on a taper, so if your income is 12,570 then you can receive 5k in tax free interest.

All our cash savings are in my (non-working) wife's name

https://www.gov.uk/apply-tax-free-interest-on-savi...

How many people earning less than 12570 have 100,000 in savings?

[OldSkoolRS]

vulture1 said:

Carbon Sasquatch said:

Likely yes, particularly as S&S investments look less attractive right now.

It's also worth knowing that low earners can receive more tax free interest - known as the starting rate. If your income < 17,570, then you can receive more tax free interest. It works on a taper, so if your income is 12,570 then you can receive 5k in tax free interest.

All our cash savings are in my (non-working) wife's name

https://www.gov.uk/apply-tax-free-interest-on-savi...

How many people earning less than 12570 have 100,000 in savings?

Perhaps someone who has a very small pension/other tax free income and has received an inheritance?

[Spevs]

OldSkoolRS said:

vulture1 said:

Carbon Sasquatch said:

Likely yes, particularly as S&S investments look less attractive right now.

It's also worth knowing that low earners can receive more tax free interest - known as the starting rate. If your income < 17,570, then you can receive more tax free interest. It works on a taper, so if your income is 12,570 then you can receive 5k in tax free interest.

All our cash savings are in my (non-working) wife's name

https://www.gov.uk/apply-tax-free-interest-on-savi...

How many people earning less than 12570 have 100,000 in savings?

Perhaps someone who has a very small pension/other tax free income and has received an inheritance?

Or someone who has worked their bks off for 40 years been prudent, taken early retirement, not taken Company pension yet and is below 67 years old to get State Pension.

[Spevs]

FiF said:

Yes, just been doing a review, and realised that will have to do some fast footwork to move stuff. Got lazy and just kept going for the %. Only today had more or less decided where to move some that had built up in a current account but not actually actioned anything yet, now need to think again.

I find this site very helpful when trying to find best deals out there

https://www.money.co.uk/savings-accounts

Also find these good to find best rates, but using the platform will cost you 0.25%

https://www.flagstoneim.com/clients/rates/

Edited by Spevs on Thursday 6th October 03:12

[LastPoster]

VR99 said:

For anyone who is more clued up than myself, are we permitted to use a combination of both a cash and S&SISA in a given tax year or is it one or the other as only 1 account is permitted per tax year?

I haven't used cash ISA's in many years, opting to use my S&SISA instead for the last couple of years, the idea that potentially we could receive a guaranteed 5% return (tax free) on a £20k balance in a cash ISA for the 23-24 tax year sounds quite appealing Vs the risk of Equities however no idea which will fare better next year.

Yes you can pay into both, but the limit is £20k in total not per ISA

[The Leaper]

vulture1 said:

Carbon Sasquatch said:

Likely yes, particularly as S&S investments look less attractive right now.

It's also worth knowing that low earners can receive more tax free interest - known as the starting rate. If your income < 17,570, then you can receive more tax free interest. It works on a taper, so if your income is 12,570 then you can receive 5k in tax free interest.

All our cash savings are in my (non-working) wife's name

https://www.gov.uk/apply-tax-free-interest-on-savi...

How many people earning less than 12570 have 100,000 in savings?

Easily done. Main earner works and pays tax, possibly at the higher rates, partner has low income, so it makes sense for tax reasons that all savings, other than ISAs maybe, are in the partner's name. Ask me how I know.....

This is pretty standard IFA advice.

R

[The Leaper]

vulture1 said:

Carbon Sasquatch said:

Likely yes, particularly as S&S investments look less attractive right now.

It's also worth knowing that low earners can receive more tax free interest - known as the starting rate. If your income < 17,570, then you can receive more tax free interest. It works on a taper, so if your income is 12,570 then you can receive 5k in tax free interest.

All our cash savings are in my (non-working) wife's name

https://www.gov.uk/apply-tax-free-interest-on-savi...

How many people earning less than 12570 have 100,000 in savings?

Easily done. Main earner works and pays tax, possibly at the higher rates, partner has low income, so it makes sense for tax reasons that all savings, other than ISAs maybe, are in the partner's name. Ask me how I know.....

This is pretty standard IFA advice.

R

[Jaguar steve]

Spevs said:

OldSkoolRS said:

vulture1 said:

Carbon Sasquatch said:

Likely yes, particularly as S&S investments look less attractive right now.

It's also worth knowing that low earners can receive more tax free interest - known as the starting rate. If your income < 17,570, then you can receive more tax free interest. It works on a taper, so if your income is 12,570 then you can receive 5k in tax free interest.

All our cash savings are in my (non-working) wife's name

https://www.gov.uk/apply-tax-free-interest-on-savi...

How many people earning less than 12570 have 100,000 in savings?

Perhaps someone who has a very small pension/other tax free income and has received an inheritance?

Or someone who has worked their bks off for 40 years been prudent, taken early retirement, not taken Company pension yet and is below 67 years old to get State Pension.

A person might have earned or saved or inherited or won substantially more than that in the past and might now be in a position to reduce their taxable income to a smudge below their personal allowance to avoid paying tax.

If a couple both do that they'll have a combined income of around £2k a month entirely tax-free.

[RichTT]

Best Cash ISA i've seen so far is 3.5% for a 3 year lock up.

[Mr Whippy]

Ezra said:

Even if we're heading to 5% on cash ISA's, its not where I'd be putting my money if inflation is 10%. Think I'm sticking with the S&S ISA route and likely heading in the direction of wealth preservation funds.

The tightening to get rates to 5%+ will crush inflation so no worries there.

And if inflation doesn’t drop rates will be going higher sooo.

But yeah the window of opportunity is probably going to be non-existent.
The offering of cash ISAs anywhere near the base rate is missing… unless you lock in money for a long period.
By the time cash isas catch up it’ll be time to not be using them again.

[johnnyBv8]

RichTT said:

Best Cash ISA i've seen so far is 3.5% for a 3 year lock up.

Virgin Money are doing 4.12% for 2yrs and 4.25% for 3yrs.

[Zoon]

johnnyBv8 said:

RichTT said:

Best Cash ISA i've seen so far is 3.5% for a 3 year lock up.

Virgin Money are doing 4.12% for 2yrs and 4.25% for 3yrs.

For folk not wanting to commit that long, Shawbrook are doing 3.70% on 12 months.

[FiF]

It all depends as usual. I agree that the interest rates are going to take a while to get up to those heights it depends what you have.

I did very quick look at my spreadsheet yesterday once had twigged what was happening. Whilst there's a fair bit in various tax free wrappers, the interest tax payable accounts will earn this year is over £900 based on interest rates today. Which after the recent years of earning square root of bugger all was a surprise must admit. That's just using simple interest calculation and to be precise need to work out the effective % when compounded.

Therefore as mentioned above the 10k which had accumulated in a current account and was probably going somewhere to pay 2.5% before tax needs to go somewhere else in order to avoid incurring tax.

That may be a one year fixed ISA, say 2.5% just looking at one place already using, 3.5% seems easy to get eg Virgin Money. Plus it might be worthwhile moving another 10k from a relatively lower paying easy access bs account.

Or start doing the calcs for Mrs F, non tax payer, but recall she's got a fair bit stashed around the place already, mostly from the years when we were putting all cash savings in her name, so need to go through that for her. Though noting the earlier post about the extra allowance if earnings less than 17k ish, need to review it that way too.

Tbh somewhat relieved that we had noted M Lewis various comments over the years about being wary of simply chasing the % and ending up moving funds but losing the tax free wrappers.

Thankfully stocks and shares are in ISAs.

[droopsnoot]

I am feeling a little better about leaving stuff in my Cash ISAs rather than moving it to S&S. I haven't actually looked at whether the figures add up on that.

[Spevs]

Zoon said:

johnnyBv8 said:

RichTT said:

Best Cash ISA i've seen so far is 3.5% for a 3 year lock up.

Virgin Money are doing 4.12% for 2yrs and 4.25% for 3yrs.

For folk not wanting to commit that long, Shawbrook are doing 3.70% on 12 months.

I believe it may be a good time to act on this after BOE next meeting early November (so in December when revised rates have dripped through), rates are tipped to go up another 0.75%