Best of the Week
Most Popular
1.UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - Nadeem_Walayat
2.Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - James_Quinn
3.UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - Nadeem_Walayat
4.Billionaire Investors Backing A Marijuana Boom In 2017 - OilPrice_Com
5.Emerging Markets & Basic Materials Stocks Breaking Out Together - Rambus_Chartology
6.Global Currency Reserve At Risk - Jim_Willie_CB
7.Gold and Silver: Your Stomach Is Probably Wrenching Right Now - The_Gold_Report
8.Warning: The Fed Is Preparing to Crash the Financial System Again - Graham_Summers
9.Basic Materials and Commodities Analysis and Trend Forecasts - Rambus_Chartology
10.Discover Why A Major American Revolution Is Brewing - Harry_Dent
Last 7 days
Gold Mining Stocks 2017 Fundamentals - 20th Aug 17
EIA Weekly Report and Crude Oil - 19th Aug 17
4 Insights for Adjusting Your Portfolio in a Rate-hike Environment - 19th Aug 17
Gold Direction Indicator - 19th Aug 17
Historical Inevitability and Gold and Silver Ownership - 19th Aug 17
You Are Being Lied To About “Low” Gold Demand - 19th Aug 17
This is Why Cocoa's Crash Was a Perfect Setup - 19th Aug 17
Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High - 19th Aug 17
North Korea Is Far From Being Irrational… It Has A Plan - 18th Aug 17
US Civil War - FUNCTIONAL ILLITERATES TRYING TO ERASE HISTORY - 18th Aug 17
Bitcoin Hits New All-Time High Over $4,400 As It Catches Paypal In Total Market Cap - 17th Aug 17
3 Psychological Ingredients behind Great Web Content - 17th Aug 17
The War on Cash - Rogoff, Orwell and Kafka - 17th Aug 17
The Stock Market Guns of August, Trade Set-Up & Removing your Rose Tinted Glasses - 16th Aug 17
Stocks, Bonds, Interest Rates, and Serbia, Camp Kotok 2017 - 16th Aug 17
U.S. Stock Market: Sunrise ... Sunset - 16th Aug 17
The Next Tech Crash Could Delay Your Retirement by a Decade - 15th Aug 17
Gold and Silver Precious Metals Nearing Breakout - 15th Aug 17
North Korea Showdown: Pivotal Market Turning Point - 15th Aug 17
Tech Stocks DOT COM Bubble Do-Over? - 14th Aug 17
Deep State Conspiracy or Chaos - 14th Aug 17
From the Trans-Atlantic Axis and the Trans-Asian Axis - 14th Aug 17
Stock Market Intermediate Correction Underway - 14th Aug 17
The Islamic State Jihadi Pivot to Asia - 13th Aug 17
Potential Pivots Upcoming for Stocks and Gold - 13th Aug 17
North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - 12th Aug 17
Gold Stocks Coiled Spring - 12th Aug 17
Neil Howe: The Amazon-Walmart Rivalry Will Determine the Future of Retail - 12th Aug 17
How to Alton Towers Half Price Discount Entry 2017 and 2018, Any Time, No Pre-Booking! - 12th Aug 17
Top 3 Technical Trading Tools Part 2: Relative Strength Index (RSI) - 11th Aug 17
What Makes Women Better Investors - 11th Aug 17
Crude Oil Price Precious Metals Link in August - 11th Aug 17
Influencer Marketing Predictions All Businesses Should Take Into Account - 11th Aug 17
Really Bad Ideas - Government Debt Isn’t Actually Debt - 10th Aug 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Savers Maximise the Personal Savings Allowance for Bigger Returns

Personal_Finance / Savings Accounts Mar 28, 2017 - 12:26 PM GMT

By: MoneyFacts

Personal_Finance

As a new tax year approaches, savers may well be readying their cash to invest in a new ISA, but the latest research by Moneyfacts.co.uk reveals why savers should still consider maximising their Personal Savings Allowance (PSA) for bigger returns.

Since April 2016, savers have been given an individual Personal Savings Allowance to earn a portion of savings income or interest tax-free, with basic rate (20%) tax payers given a £1,000 allowance and higher rate (40%) taxpayers getting £500. This momentous change means that now most taxpayers (estimated at 95%) no longer pay tax on their savings interest.


As interest rates remain poor compared to years gone by, savers would need to invest a significant sum to breach the allowance. In fact, if savers were to invest £20,000 (the new 2017/18 ISA allowance) in the best ISA instead of the best non-ISA, they would be worse off (as the table shows), while neither return would take them over the PSA limit.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“It’s been almost a full year since the Government introduced the Personal Savings Allowance to enable savers to earn more savings interest tax-free. While this has been an ingenious way to encourage consumers to save, it has also had a big impact on the appeal of ISAs.

“ISAs overall have been struggling to keep up with the more desirable returns that standard savings accounts have on offer. In fact, only Coventry Building Society’s easy access ISA attempts to pay anywhere close to a non-ISA Best Buy equivalent, with a difference of 0.10%.

“The difference on average between ISAs and non-ISAs is clearly a worry. A year ago, the average one-year fixed ISA paid 1.31%, as did the non-ISA equivalent. Today, however, the average one-year ISA has fallen by 0.43%, whereas the average one-year non-ISA has fallen by a lesser 0.34%.

“Despite the allowances taxpayers receive, savers have still had to endure years of low interest rates due to Government lending initiatives, which were only exacerbated by the Bank of England’s decision to cut the base rate by 0.25% last year. All this combined has forced savings rates to plummet, making it vital for savers to keep on top of the Best Buys and to try not to be too discouraged when it comes to saving for the future.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife