NS&I Income Bonds, etc.

[55palfers]

Currently paying 1.15%.

Given Rishi needs all the cash he can get his hands on at the moment, will this rate hold steady for the foreseeable?

[deggles]

Who knows. On the one hand it's nice to have a (relatively) decent rate product that's 100% backed by the Treasury, but part of me wonders if it's just a good way of luring people in having made it easier to impose capital controls when everyone's money is held by the government.

I'm only half joking. Nothing feels like it's off the table any more!

[FunkyNige]

55palfers said:

Currently paying 1.15%.

Given Rishi needs all the cash he can get his hands on at the moment, will this rate hold steady for the foreseeable?

Martin Lewis reckons so
https://www.moneysavingexpert.com/latesttip/
(scroll down to the savings bit)
"The Govt's told NS&I to raise billions, so its rates are likely to stay strong. Put money in NS&I and you're lending to the Govt. The fact it's table-topping shows the Govt wants to raise money, and last week the Treasury increased NS&I's financing target to £35bn, nearly six times the £6bn target set in Mar. That means it's now more likely to defend its position robustly at the top of the best-buy tables, providing savers with some certainty. What's more, its rules say it must tell you 2mths in advance of rate cuts which adds some comfort. We suspect it may also launch more products."

[emicen]

Think they’ll attract a fair amount of money this way as the instant access savings accounts and interest paying current accounts get worse by the day.

Santander 1-2-3, already down to 1%, drops to 0.6% in August. Club Lloyds is going from an aggregate 1.2% on a limit of £5k to an aggregate of 0.78% in October.

[trickywoo]

anonymous said:

[redacted]

The good thing I’ve found with ns&i is how little effort it takes.

For the sake of a few mouse clicks it’s better than nothing.

[JulianPH]

anonymous said:

[redacted]

Don't forget any tax you will have to pay on them (they are not tax free)...

[55palfers]

trickywoo said:

anonymous said:

[redacted]

The good thing I’ve found with ns&i is how little effort it takes.

For the sake of a few mouse clicks it’s better than nothing.

My thoughts exactly.

Santander cutting 123 account rate to 0.6%, most banks paying 0.1% or less. Happy to lend Rishi a few bob in these difficult times.

[gazapc]

JulianPH said:

anonymous said:

[redacted]

Don't forget any tax you will have to pay on them (they are not tax free)...

Is this true for most people? (obviously not powerfully built PH company directors)
Is it not included in the personal savings allowance?

I was looking into the income bonds to park some cash in ahead of a potential house purchase. Reading on moneysavingexpert seemed to suggest it is counted towards the PSA but happy to be corrected...

[Julia121]

deggles said:

Who knows. On the one hand it's nice to have a (relatively) decent rate product that's 100% backed by the Treasury, but part of me wonders if it's just a good way of luring people in having made it easier to impose capital controls when everyone's money is held by the government.

I'm only half joking. Nothing feels like it's off the table any more!

Back of my mind to. Rather annoyingly our Shawbrook deposits have just dropped from 1.33 to .75% which was the last of our better interest payers. Not sure NSI is attractive enough at the moment to move funds into them.

[leef44]

gazapc said:

JulianPH said:

anonymous said:

[redacted]

Don't forget any tax you will have to pay on them (they are not tax free)...

Is this true for most people? (obviously not powerfully built PH company directors)
Is it not included in the personal savings allowance?

I was looking into the income bonds to park some cash in ahead of a potential house purchase. Reading on moneysavingexpert seemed to suggest it is counted towards the PSA but happy to be corrected...

I believe it is included in the personal savings allowance (500 for higher rate taxpayer and 1000 for everyone else) but is taxable if you have somehow already used that amount up. I haven't checked so my data may be out of date, this is last tax year's allowance.

[JulianPH]

leef44 said:

I believe it is included in the personal savings allowance (500 for higher rate taxpayer and 1000 for everyone else) but is taxable if you have somehow already used that amount up. I haven't checked so my data may be out of date, this is last tax year's allowance.

Quite correct.

[millen]

For me N&SI is a no brainer currently, after Lloyds, Tesco, PO, Nationwide, Virgin and Shawbrook have all slashed their deposit rates. Not being powerfully built, the N&SI protection limit is fine for me (unlike the aforesaid).

One thing to watch is that N&SI doesn't give you a designated account no. So you make transfers to a general account with your specific reference as identifier. I'm assuming there's a machine-based reconciliation (rather than human-based!) but I sometimes get a bit twitchy as transfers can take a couple of days to appear on my N&SI account.

I also tend now to leave other accounts open with a small balance. I've had problems before with totally closing online accounts - sometimes they remove online access immediately making it hard work to piece together interest for tax returns. Others I recall maintained access for 30 days only.

[Elderly]

55palfers said:

Santander cutting 123 account rate to 0.6%, .

Don't forget the £5.00 per month account maintaining fee
which effectively means that you earn zero interest on the first £10,000.

[JulianPH]

anonymous said:

[redacted]

Tell me about it.

No personal income tax allowance, no child benefit and reduced personal pension contributions of £10k a year, yet a monster tax bill every year.

I wouldn't mind but I keep hearing I am not paying my fair share!

[Flooble]

I've always been a bit ambivalent about filling my pension. I still have a fair a way off to retirement and remember how there was not a ripple when Gordon Brown made his dividend tax raid, together with the moves in Poland (and others) to "nationalise" private pensions.

We often think "that could never happen here" but then it does ...

[JulianPH]

anonymous said:

[redacted]

Of course you are correct, that was a very simple schoolboy error from me to not factor in the new tapering measures.

Just makes matters worst, of course!

[JulianPH]

Flooble said:

I've always been a bit ambivalent about filling my pension. I still have a fair a way off to retirement and remember how there was not a ripple when Gordon Brown made his dividend tax raid, together with the moves in Poland (and others) to "nationalise" private pensions.

We often think "that could never happen here" but then it does ...

I've never yet spoken to anyone at retirement who has said "I wish I hadn't put as much as I did into my pension over the years"!

[Flooble]

JulianPH said:

I've never yet spoken to anyone at retirement who has said "I wish I hadn't put as much as I did into my pension over the years"!

Perhaps, but for those of us who *only* have, for the sake of argument, £40000 per year to invest, putting it all in the pension and hoping the Government doesn't help itself at some point over the next 30 years feels like a bit of a risk compared with putting some in the pension, some in an ISA and some elsewhere.

[supersport]

anonymous said:

[redacted]

It would be interesting to know what some of these people consider to be a fair amount.

I hate my P60 and I suspect we will be paying a lot more in the years to come.

Although I would happily pay an extra penny or two for health and education, and maybe whatever else the Romans did for us

[mikeiow]

Elderly said:

55palfers said:

Santander cutting 123 account rate to 0.6%, .

Don't forget the £5.00 per month account maintaining fee
which effectively means that you earn zero interest on the first £10,000.

Yup. Might move to the “Lite” version (£2pcm) to just take the cashback on the bills next month