Find out How to Get the Best Interest Rates for your Savings
It’s hard to believe, but over six years ago the Bank of England set the official bank rate at 0.5%. Excellent news for those of us with mortgages, but for those who rely on their savings to supplement their income, it’s increasingly difficult to know who pays the best rates.
We have all got used to the banks and building societies paying next to nothing in interest on our savings. They, of course, know this and can tempt even the most wary of investors by advertising headline rates which seemingly pay more than their competitors.
Once they’ve captured your savings, these higher rates mysteriously plummet without you noticing or you find once you’ve read the small print that you only qualify for a short period or if you pay a certain amount into the account each month.
Moving savings from one bank or building society to another to achieve a small increase in interest for a short period of time, simply doesn’t appeal to most of us. So, the funds stay in low or no interest bearing accounts for long periods of time, whilst we wait for the official bank rate to go up.
Keeping cash over the long term is not a low risk strategy as many might think because whilst you feel you are taking no risk, inflation is eating away at the buying power of the capital. In reality, it is reducing in value. But there are many people who feel they need to hold large sums in cash over the longer term, such as the elderly or those who fear loss if they invest in shares or other investments.
For UK taxpayers, the interest rate advertised is before tax and savings tax is deducted before you receive it, currently 20%. I have many clients who allow the interest to roll up because they don’t need the income. As far as the tax man is concerned, it’s still income and the tax will be taken. For some, interest payments push them into high rates of tax and reduce Personal Allowances.
People can fall into all sorts of traps with their bank and building society accounts so, at The Wealth Care Partnership, we now have a Cash Deposit Management Service. This can be a stand-alone service for those who only want to keep their savings in cash, but it is also incorporated in all aspects of our advice, including:
- Funding long term care
- Keeping reserves
- Trust fund management
- Pension or drawdown fund management
- Cash deposits for Powers of Attorney and Court Appointed Deputies
Not only can we source the best current rates, we can ensure all your savings are protected by the Financial Services Compensation Scheme (FSCS) by spreading it across different companies and not exceeding the maximum amount of £85,000 in any one bank or building society’s products.
Each year, we review the accounts and make recommendations to switch to keep in the best interest-bearing accounts. We get all the paperwork and necessary identification verification for each selected account sorted for you, taking the hassle and stress out of moving from one account to another.
Contact us to find out how to get the best interest rates for your savings. We will calculate the best potential return across a balanced portfolio over the timescale you select and compare it with your existing savings return. We can also advise on tax issues and provide alternatives to cash. Please call for an initial chat on our free phone telephone number 0800 6528232 or request a call by completing the ‘Request a Callback’ box on our website: www.twcp.co.uk.
This article is for information purposes only and does not constitute personalised advice. Any information or opinion expressed here is solely that of the author. The Wealth Care Partnership Limited bears no responsibility for any action taken directly unless it has engaged with you as a Client and provided personalised advice.