Money thoughts …

Box Brownie said:
I see what you mean. Though as they seem to introduce a new product every year.....I surmise it should be possible to transfer in to the next 'fixed' 12 month ISA ?

The one thing I am unclear about? When you transfer an ISA to the new 12 month higher interest one.....can you only transfer the max £20k appropriate to the tax year or can you transfer the whole amount if above £20k ?
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You can transfer in the whole balance.
The 20k is a yearly allowance you have.
 
cambsno said:
Just a very basic pension question, based on a random thought.

If you have a pension, lets say for easy maths its worth 200k at retirement age (65) - The plan says something like you can take out 50k and then get 10k a year, or take nothing and get 15k a year. What happens about when you die? So suppose you die at 66 having only taken out 15k for that year - what happens to it? Likewise, what if you live for another 30 years - that's 450k due at 15k a year but your pot is only 200k?
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Assuming this is money / investments in a SIPP or other defined contribution pension (rather than a defined benefit, aka "final salary" scheme) then I've been looking into this for my own pension pots ..

You can take 25% out tax free, either all at once or have 25% of each withdrawal exempt from tax. Let's say you take your 25% and have 150k left. You can then either take it out a bit at a time as you need, so the pot dwindles but there might be some left when you die (potentially a lot if you die at 66) or you can buy an annuity. If you leave it in the pot, the pension provider should allow you to nominate who this goes to (HL and Creative where my pensions are both allow you to do this, a couple of my friends are going to get a surprise when I die) and the recipient will get it tax free if you are under a maximum age (75 I think) when you die. It isn't part of your estate for IHT purposes, to my understanding.

Alternatively you can use that 150k (or some part of it) to buy an annuity which will pay out a certain amount each month until you die. If you die age 66 that's good for the annuity provider as they've got a lot from you and paid little, if you die age 106 it's good for you as you've had 40 years of payments for the same purchase price. There is no capital to be inherited in this case as you've spent it on the annuity. It's a gamble, but it means you know you will have income while you live.
 
onomatopoeia said:
Assuming this is money / investments in a SIPP or other defined contribution pension (rather than a defined benefit, aka "final salary" scheme) then I've been looking into this for my own pension pots ..

You can take 25% out tax free, either all at once or have 25% of each withdrawal exempt from tax. Let's say you take your 25% and have 150k left. You can then either take it out a bit at a time as you need, so the pot dwindles but there might be some left when you die (potentially a lot if you die at 66) or you can buy an annuity. If you leave it in the pot, the pension provider should allow you to nominate who this goes to (HL and Creative where my pensions are both allow you to do this, a couple of my friends are going to get a surprise when I die) and the recipient will get it tax free if you are under a maximum age (75 I think) when you die. It isn't part of your estate for IHT purposes, to my understanding.

Alternatively you can use that 150k (or some part of it) to buy an annuity which will pay out a certain amount each month until you die. If you die age 66 that's good for the annuity provider as they've got a lot from you and paid little, if you die age 106 it's good for you as you've had 40 years of payments for the same purchase price. There is no capital to be inherited in this case as you've spent it on the annuity. It's a gamble, but it means you know you will have income while you live.
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Emboldened above and broadly what I posted previously
Here post #306

www.talkphotography.co.uk

Money thoughts …

I have really thought about buying PB's ! How much does one have to invest to say £20 per month ( average over a year ) ? If you mean what holding you would need to return you £20 per month in winnings, going off my average over the last few years, a holding of £8,000 would do it. Although you...
www.talkphotography.co.uk www.talkphotography.co.uk

However, my understanding was/is slightly different to what you say above....as follows...:-

To get your up to 25% Tax free money you need to crystallise the pension pot though it doesn't need to be the whole pot i.e. you can leave a portion uncrystallised leaving you the option (if needed to take another 'up to 25%') This what I have done to keep my options as open as practically possible.

But of note, the crystallised portion is now 'committed to be used', though only when ready, to be made into either a 'drawdown pension' (where if not careful you can run out of money before you die) or an Annuity Pension.
However, you can do both i.e. have an Annuity from some of the crystallised pot and a drawdown from the rest but whatever type of pension you have the income will be taxable.
Leaving any uncrystallised remainder for other decisions.

NB an Annuity once 'bought' cannot be undone....likewise, once the "Drawdown Pension" has been setup you cannot undo it. However, the drawdown pension is under your control i.e. you can draw as needed or simply leave untouched and should (given favourable stock market conditions...............which they have not been since Russia invaded Ukraine :( ) grow :)

Something to bear in mind with a Drawdown Pension is that in an ideal world you should not draw more than the fund is growing e.g. if it is growing @4% then only draw say 3%
To do otherwise means that you are eroding the capital but nothing wrong with that other than the money available is continually reducing and might expose you to simply running out of money! :( One might say that you would ideally run out of money on the day you die :LOL:

Though simple, there is complexity and that is why an IFA is important to not only help you manage (yes some folk do it themselves) your retirement pot investment(s) and also to guide you through the choices available with regard to which method of pension is right for you.

Note ~ Annity rates have been dire for some time and so far have not looked particularly attractive. Having said that if you have a life impacting medical history or problem then medically enhanced annuities do exist.
 
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Me £0
Wife £50

really quite poor returns
 
The boss £225, me nowt, only re invested back in end of last month so hopeful £40k will bring in more prizes than a single £.
 
mj4456 said:
The boss £225, me nowt, only re invested back in end of last month so hopeful £40k will bring in more prizes than a single £.
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if you invest end of may your bonds wont be in the draw until July..
 
KIPAX said:
if you invest end of may your bonds wont be in the draw until July..
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I know what you say is correct but don’t understand why. There should be a cut off date for numbers going to the next draw not potentially 7 weeks them having the money but not counted.
 
Tulipone said:
I know what you say is correct but don’t understand why. There should be a cut off date for numbers going to the next draw not potentially 7 weeks them having the money but not counted.
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It is odd... the shortest it can be done is 4 weeks then if you invest the last day of one month..... juts seems wrong.. but there rules i guess :(
 
Your are buying a fixed term monthly Bond so it starts at the beginning of the month and lasts for the month. It will carry on to the next month unless you cash in.
 
That’s why I held onto the cash till months (May) end, they sit on the cash this month and the numbers enter for Julys draw.
 
So assume you have filled the whole of your ISA allowance for the current tax year, but realise that a previous years ISA is about to mature. You want to keep the tax free status of the maturing ISA but, I think, cannot buy another leaving you with a pitiful rate if you leave it where it is until April next year.

Other than withdraw and loose the non tax status or leave where it is for the low holding tax rate are there other options I don’t know about?
 
You can open another ISA and get the new provider to transfer the maturing one together with its interest into it.
A transfer does not count towards your ISA allowance, only new money. You cannot simply withdraw the money yourself and transfer it, the new provider does it all for you.
Not all providers allow transfers though. Check on Money Saving Expert for the best rates and their tables also show if transfer ins are allowed.
 
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Tulipone said:
So assume you have filled the whole of your ISA allowance for the current tax year, but realise that a previous years ISA is about to mature. You want to keep the tax free status of the maturing ISA but, I think, cannot buy another leaving you with a pitiful rate if you leave it where it is until April next year.

Other than withdraw and loose the non tax status or leave where it is for the low holding tax rate are there other options I don’t know about?
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Fixed Rate Online Bond ? I am with nationwide.. Thye are offering ISA at 4.50% and fixed rate bonds at 4.25% you can put as much as you want in but you gte taxed on any interest made over 1K so you would have to put around £25k in to pass £1k and pay tax
 
Suvv said:
You can open another ISA and get the new provider to transfer the maturing one together with its interest into it.
A transfer does not count towards your ISA allowance. You cannot simply withdraw the money yourself and transfer it, the new provider does it all for you.
Not all providers allow transfers though. Check on Money Saving Expert for the best rates and their tables also show if transfer ins are allowed.
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Thanks, I’ll need to look into a transfer.
KIPAX said:
Fixed Rate Online Bond ? I am with nationwide.. Thye are offering ISA at 4.50% and fixed rate bonds at 4.25% you can put as much as you want in but you gte taxed on any interest made over 1K so you would have to put around £25k in to pass £1k and pay tax
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I am also with Nationwide - maybe the ISA will work but FRB won’t fly as we are up to the limit with PSA. We are up to about £950 each without realising Nationwide were going to give us the Fair share £100. Understand that takes us over and counts as interest.
 
We have taken the Nationwide's offer of the FRB @ 5.5%, it will take us over the PSA and we will pay a little tax but it would be injudicious not to.
I'm presuming this offer is related to the take over of Virgin Money, perhaps requiring the funds to pay Mr Branson?

P.S, this offer is for 18 months so spread over two tax years. You'll need to do your sums to compute any tax due.
 
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admirable said:
We have taken the Nationwide's offer of the FRB @ 5.5%,
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I have a FRB account and multiple isa at 5.5% (last aug rates) which ALL mature middle of august.. rates are now down to 4.5% so i will hopefully get the special offer then if not run out ...
 
Regarding the transfer, one of the options the new provider gives is to transfer the maturing ISA only when it has matured so you don't incur any early withdrawal penalties and you don't have to wait for the maturing ISA to be put into a low interest accunt before you can transfer it.
Normally the new providers only give you the option of a transfer, if they allow it, when you open the new ISA, so you can't do it later.
 
Tulipone said:
Thanks, I’ll need to look into a transfer.

I am also with Nationwide - maybe the ISA will work but FRB won’t fly as we are up to the limit with PSA. We are up to about £950 each without realising Nationwide were going to give us the Fair share £100. Understand that takes us over and counts as interest.
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I do not know what money you have where but if you are saying that you predict that the interest you will get in 2024/5 on savings will mean that you wil pay tax there may be a way around that.

Some accounts pay interest yearly and a few will not pay interest until the 2025/6 tax year, Cynergy Bank is one.

Therefore you can withdraw your savings from the existing account(s) before the interest takes you over the £1000 / £500 limit and put the savings in an account which will not pay interest this financial year.

Obviousy that will impact on the interest for the next tax year but you will have a new ISA allowance then so possibly you will be able to keep the normal savings interest down below the limits.
 
I think that like others have found, fixed rate bonds pay a bit better than ISAs so optimising those to the Personal Savings Allowance makes sense. If you go over £1k of interest than that portion is taxed making it probably much less lucrative.
 
There is anew boy on the block for Cash ISAs paying a whopping 5,2%

Trading 212
 
Mr Bump said:
There is anew boy on the block for Cash ISAs paying a whopping 5,2%

Trading 212
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Not the same thing, interest rate is not fixed for the term.
 
The bubble of decent fixed rate savings dipping more recently - with today's 2% inflation claim I wonder if the BoE will drop rates tomorrow? Presumably 1/4%? It is one of those times maybe to find the best fixed rates and stick as best you can.
 
Got my car insurance quote last week, almost double last years. No claims, no fines, no nothing, been with them for years. Considering the insurance "body" says claims in Wales are down since the 20MPH that seems a bit strange (I live in Wales) So I went elsewhere, got it for a few quid more than last years price.
I dont understand the logic of a company trying to rip off a regular good customer? Seems like a bad business idea to me.
 
Tysonator said:
Sounds too good !
Has any used Trading 212 ! ?
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its fully FCSA protected and was on the martin lewis money show and his site
its a new player so they are offering big to build in the UK
I have £11k in an account now
 
AndrewFlannigan said:
According to what I can find, Trading 212 is a broker and not a bank...


It looks as if there are some gotchas to be aware of in its charges.
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it does a lot of things , Martin Lewis specifically said he thought the company was offering over the odds to get people on to the platform in the hope they might use the other products.
He said just don't bother and use the Cash ISA, he also said he thought they would lower the amont after a short while maybe 6 months, i think the bottom line is opening thes acccounts is easy and for someone like me that has a lot of spare cash at the moment I can make an easy 5% without any real risk or penelties. just keep below th £85k level for cover

Trading 212 UK Ltd. is registered in England and Wales and is authorised and regulated by the Financial Conduct Authority (Firm reference number 609146).
 
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I also have a large account with virgin money savings they were offering 5% but have dropped it to £4.66%
 
My ISA with Virgin Money @ 5.61% matures in September. I doubt I'll se that rate again for a while. :(
 
Tysonator said:
Sounds too good !
Has any used Trading 212 ! ?
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I opened an account this morning to use up the rest of my ISA allowance on something more accessible than my main cash ISA that is locked in for another year, as this year only following a bereavement I will be able to get close to the 20k limit. It's very "app" with selfies for some aspects (facial recognition) but the interface seems OK. I won't be putting anything close to 85k in, not even a tenth of that, so as an easy way to get a good rate it works for me.
 
onomatopoeia said:
I opened an account this morning to use up the rest of my ISA allowance on something more accessible than my main cash ISA that is locked in for another year, as this year only following a bereavement I will be able to get close to the 20k limit. It's very "app" with selfies for some aspects (facial recognition) but the interface seems OK. I won't be putting anything close to 85k in, not even a tenth of that, so as an easy way to get a good rate it works for me.
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5.2% its a no brainer for a cash isa even if it just lasts for 6 months
 
Mr Bump said:
oh well interest rates held, good news :cool:
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This is something which is often overlooked. I'm certain I've read that there are more savers relying on interest than people in debt worrying about interest rates but savers always seem to be forgotten in all this. Just read today that the BOE will almost certainly cut rates once our new Labour govt is installed so that they can take the credit, if you think it's creditable to cut rates. That's the opinion of the commentator anyway.

I won £50 on Premium Bonds this month, £30k invested in them.
 
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