Low interest rates on savings

[MrCurry]

You can create an online account.

Premium Bonds

Buy Premium Bonds for yourself or a child under 16: easy access and a chance to win tax-free prizes in our monthly prize draw. Visit our site for more details.

www.nsandi.com

Thanks! I’ll have to research if you’re allowed to hold premium bonds when you live abroad. If not, I’ll have to use my old U.K. address to register.

 

[A380]

How do you sign up for emails? I have some paper premium bonds from the 1970s…!

You might already be a millionaire…

 

[MrCurry]

You might already be a millionaire…

Quite possibly! Sadly, only in Swedish kronor though…

 

[Maltin]

Thanks! I’ll have to research if you’re allowed to hold premium bonds when you live abroad. If not, I’ll have to use my old U.K. address to register.

You can hold them while not resident in the UK assuming the other country doesn’t have restrictions. Might also be taxable income in another country.

Non-resident Premium Bonds

Hi, I suspect this'll not get an answer, but here goes anyway...

forums.moneysavingexpert.com

 

[gentlegreen]

I'm still humming and ha-ing.
Damn I hate this...

 

[gentlegreen]

Bloody hell.
I've set up a new Santander ISA, opened it with cash, and there was an electronic form to transfer in an old ISA from Tesco, but I apparently needed to print out a form to transfer-in my defunct Santander ISA...
Insane waiting time on phone so I'm going to have to physically go to my branch tomorrow to make it work - all for a few quid of tax savings...

So much for online banking ...

 

[UnderOpenSky]

Bloody hell.
I've set up a new Santander ISA, opened it with cash, and there was an electronic form to transfer in an old ISA from Tesco, but I apparently needed to print out a form to transfer-in my defunct Santander ISA...
Insane waiting time on phone so I'm going to have to physically go to my branch tomorrow to make it work - all for a few quid of tax savings...

So much for online banking ...

That would be enough to make me choose a different bank. I fact I did recently for another product.

 

[gentlegreen]

That would be enough to make me choose a different bank. I fact I did recently for another product.

A key issue is my handwriting - even in caps is pretty well illegible.
I also ended up worried I hadn't done the electronic form properly ...
I hope my gout has eased up by tomorrow.
I have 14 days to do it, but I wanted it out of the way this week.

 

[UnderOpenSky]

A key issue is my handwriting - even in caps is pretty well illegible.
I also ended up worried I hadn't done the electronic form properly ...
I hope my gout has eased up by tomorrow.
I have 14 days to do it, but I wanted it out of the way this week.

I transfered a small pension to Vanguard yesterday and they handle it all. Could you try that?

 

[gentlegreen]

I transfered a small pension to Vanguard yesterday and they handle it all. Could you try that?

I ought to have got someone in years ago.
It's just savings - far too much because most people would have moved house long ago ...
My pension is an educational one so is probably best left where it is... and I find actual investments far too scary.

 

[nick]

so, might I suggest, the important thing is more to get it within the tax free wrapper, the current interest rates are less important. Once it is in an ISA (any ISA) then you can transfer to other providers without taking it out of the ISA wrapper. Also (if married) you can pass it to spouse on death still within the tax free wrapper

No idea how much savings you have etc, but if interest rates rise etc etc, you may find you have to end up paying tax on the savings interest (in excess of 1000 / 500 / 0 p.a- dependent on your tax band). But you can put 20k pa into an ISA and never have to pay tax upon that interest (they could change the ISA rules, but that would, I suspect, be electoral suicide).

Many people will go - "that will never apply to me" - but let's say the govt removes the personal savings allowance (it is quite a new concept after all ) , then it will apply to you after all

 

[teuchter]

Previously there was advice (including on this thread) that putting money into a cash ISA wasn't always the best plan, partly because of the savings tax allowance thing but partly also because they offered significantly worse interest rates than regular savings accounts.

I assume that changes a bit, now that interest rates are going up a lot? As I understood it, the lower interest rates on ISAs are due to an increased cost of administration that they have to factor in ... but that cost will become less and less significant as the basic interests rise?

 

[kabbes]

I think the general point is that you should always use your ISA allowance before you start putting money into accounts that aren’t tax exempt. There is then a separate discussion about what form those investments should take. But if you don’t have more than £20k per year of money to invest (after pension savings) then the ISA is the way to go, regardless of what you invest it in.

You can switch ISA savings back and forth at will between cash funds and shares, btw

Of course, if the ISA is offering a terrible rate of interest, it makes sense to look for one that doesn’t. There are options for that beyond cash ISAs offered by banks, though

 

[strung out]

I think the general point is that you should always use your ISA allowance before you start putting money into accounts that aren’t tax exempt. There is then a separate discussion about what form those investments should take. But if you don’t have more than £20k per year of money to invest (after pension savings) then the ISA is the way to go, regardless of what you invest it in.

You can switch ISA savings back and forth at will between cash funds and shares, btw

Of course, if the ISA is offering a terrible rate of interest, it makes sense to look for one that doesn’t. There are options for that beyond cash ISAs offered by banks, though

Not quite true, depending on the time scales we're talking about and whether you're a basic rate tax payer, and therefore have a £1,000 Personal Savings Allowance.

An example - if you can only save £5,000 a year and know you're only saving for the short to medium term, then it makes sense to put those savings into a 3% savings account, rather than a 1% ISA. There will be a nice graph to be made at which the money lost in tax (once your personal savings allowance is used) overtakes the benefit in additional interest, depending on the difference in interest rates between the two accounts, and the amount invested.

The closer you are to being able to fill your ISA allowance each year, the more likely it is you should use that allowance, regardless of whether you're using a cash or stocks ISA.

If you're investing for the longer term and therefore using a S&S ISA, then yes, you will need to keep it in an ISA wrapper, to account for future growth taking you over the capital gains tax threshold.

 

[kabbes]

Not quite true, depending on the time scales we're talking about and whether you're a basic rate tax payer, and therefore have a £1,000 Personal Savings Allowance.

An example - if you can only save £5,000 a year and know you're only saving for the short to medium term, then it makes sense to put those savings into a 3% savings account, rather than a 1% ISA. There will be a nice graph to be made at which the money lost in tax (once your personal savings allowance is used) overtakes the benefit in additional interest, depending on the difference in interest rates between the two accounts, and the amount invested.

The closer you are to being able to fill your ISA allowance each year, the more likely it is you should use that allowance, regardless of whether you're using a cash or stocks ISA.

If you're investing for the longer term and therefore using a S&S ISA, then yes, you will need to keep it in an ISA wrapper, to account for future growth taking you over the capital gains tax threshold.

But why are you choosing a 1% ISA when apparently cash funds will pay 3%? There are a zillion money market and fixed income funds out there. If you can get a 3% cash return, why can’t you find something as good from a cash fund or fixed income fund?

Of course, if you’re not paying tax anyway (for example because you don’t plan on earning more than £1000 per year in interest) then it doesn’t make any difference, this is true.

 

[strung out]

But why are you choosing a 1% ISA when apparently cash funds will pay 3%? There are a zillion money market and fixed income funds out there. If you can get a 3% cash return, why can’t you find something as good from a cash fund or fixed income fund?

Of course, if you’re not paying tax anyway (for example because you don’t plan on earning more than £1000 per year in interest) then it doesn’t make any difference, this is true.

If the best interest cash ISA is the same rate as the best savings account, of course you should use the ISA, but experience tells us that cash ISAs often don't offer as good rates as the very best savings accounts.

I thought that in your answer to teuchter's question, you were recommending always using your ISA allowance before putting your savings anywhere else, regardless of interest rates. Apologies if I misunderstood!

 

[teuchter]

It's mentioned about half way down this page

https://www.moneysavingexpert.com/tips/2022/10/19/

Including this graph, looking at which prompts my brain to go into shut-down, but is probably fun for some people.

 

[kabbes]

The thing that strikes me is that the comparison is too limiting if you just look at products labelled as “cash ISAs”. You can start a general investment (“stocks and shares”) ISA and then buy into all kinds of cash and short dated fixed interest income instruments. That’s effectively getting a cash ISA but without restricting yourself to the poor selection of actual cash ISAs

 

[kabbes]

I mean, two years gilts currently have a yield of 3.8%p.a. Buy and hold those in an ISA wrapper and you’ll make a return of 3.8% p.a. over two years

 

[danski]

I mean, two years gilts currently have a yield of 3.8%p.a. Buy and hold those in an ISA wrapper and you’ll make a return of 3.8% p.a. over two years

Link please

 

[platinumsage]

I mean, two years gilts currently have a yield of 3.8%p.a. Buy and hold those in an ISA wrapper and you’ll make a return of 3.8% p.a. over two years

Gilts aren’t really set up for retail investors to buy nowadays, in fact i’d say they are highly inadvisable for anyone who doesn’t know what they’re doing. For a start there’s the clean vs dirty price, and the complexities of calculating what you’re total return will be given the price you’re actually offered.

Gilt funds are easy to buy, but they don’t have an end date and the capital value will fluctuate so easy to make a loss.

 

[kabbes]

Gilts aren’t really set up for retail investors to buy nowadays,

Is that so? I’ve not personally bought one for donkeys years — I remember them being something you could just acquire straightforwardly enough.

It’s true that there is price volatility if you’re buying into a gilt fund but it’s still fundamentally true that a fund using a buy and hold strategy will have a return equal to the rolling mean purchase yield. Reinvestment return should balance out price volatility. I’ve not looked into it, though, admittedly, because I have no interest in having a gilt fund!

 

[kabbes]

Link please

I’m a few days out of date, apparently. It’s dropped to 3.2% today.

TMBMKGB-02Y | U.K. 2 Year Gilt Overview | MarketWatch

TMBMKGB-02Y | A complete U.K. 2 Year Gilt bond overview by MarketWatch. View the latest bond prices, bond market news and bond rates.

www.marketwatch.com

 

[danski]

I’m a few said out of date, apparently. It’s dropped to 3.2% today.

TMBMKGB-02Y | U.K. 2 Year Gilt Overview | MarketWatch

TMBMKGB-02Y | A complete U.K. 2 Year Gilt bond overview by MarketWatch. View the latest bond prices, bond market news and bond rates.

www.marketwatch.com

Thank you. Shows how little I know about this stuff, I thought you could just post a link to an easy 'click to invest' jobbie.
I realise that's probably not possible and definitely for the best

 

[platinumsage]

One of the few places to buy them in an ISA easily with negligible fees would be HL.

Good luck working out how much you’d end up with by buying this:

Treasury 2% 07/09/2025 (T25) Gilt Share Price | T25

The latest Treasury 2% 07/09/2025 share price (T25). View recent trades and share price information for Treasury 2% 07/09/2025 and other shares.

www.hl.co.uk

Best to go cash ISA or non-ISA savings account, fixed rate or otherwise, depending on your tax needs.

 

[CH1]

Bloody hell.
I've set up a new Santander ISA, opened it with cash, and there was an electronic form to transfer in an old ISA from Tesco, but I apparently needed to print out a form to transfer-in my defunct Santander ISA...
Insane waiting time on phone so I'm going to have to physically go to my branch tomorrow to make it work - all for a few quid of tax savings...

So much for online banking ...

I had this from the Halifax. As I think I said above they had to give me a one hour appointment - but the process actually took 1h 15mins and involved a cashier, a financial adviser - wh0 had to go on Skype to Manchester to sort it all out.

Only thing is this - at the time I thought interest rates would continue to rise, so I took a one year fixed term. Now the poud has shot up, I'm wonering if I should have had a 2 year one.

 

[teuchter]

I mean, two years gilts currently have a yield of 3.8%p.a. Buy and hold those in an ISA wrapper and you’ll make a return of 3.8% p.a. over two years

However it looks like you can currently get a regular cash ISA (1 year fix) at 3.9% or a non ISA savings account (1 year fix) at 4.5%.

 

[danski]

Sorry for slight derail but I suppose it’s kind of related to this and I didn’t want to start a new thread.

Inflation.

If I was paid, say, £100 to do a task in early 2021, how much in real terms (is that how you describe it?!) would that money be worth now?

I am being paid rates agreed in 2021 so want to know what kind of percentages increase I should ask for as my boss is about to have his rate review on this job.

Thank you

 

[kabbes]

Sorry for slight derail but I suppose it’s kind of related to this and I didn’t want to start a new thread.

Inflation.

If I was paid, say, £100 to do a task in early 2021, how much in real terms (is that how you describe it?!) would that money be worth now?

I am being paid rates agreed in 2021 so want to know what kind of percentages increase I should ask for as my boss is about to have his rate review on this job.

Thank you

Something around £111 to £113 depending on how early in 2021 you mean

This may help

Inflation calculator

Use our inflation calculator to check how prices in the UK have changed over time, from 1209 to now.

www.bankofengland.co.uk

Your personal inflation will be different depending on what you actually spend your money on. But this gives you the view for a typical person.

(Over more than a few decades, it’s actually a lot harder to interpret inflation than that calculator implies. But over a few years, it’s straightforward.)

 

[danski]

Something around £111 to £113 depending on how early in 2021 you mean

This may help

Inflation calculator

Use our inflation calculator to check how prices in the UK have changed over time, from 1209 to now.

www.bankofengland.co.uk

Your personal inflation will be different depending on what you actually spend your money on. But this gives you the view for a typical person.

(Over more than a few decades, it’s actually a lot harder to interpret inflation than that calculator implies. But over a few years, it’s straightforward.)

Excellent, thank you