| | | Martin's Weekly Briefing: For more tips, alerts & puns, follow Martin on Twitter - The new personal savings allowance (PSA) is a HUGE change
- Most people's cash now in the WRONG place - shift to boost interest
- Get it right and you can earn up to 6% tax-free
The new tax year starts today, and while in the past the cheers were for the new ISA allocation, today it's time to pop open the champagne for a huge change that means for all but bigger savers an ISA now holds little point.
That's because the personal savings allowance (PSA) launches today, and it's a game-changer. Until now, in normal savings, for every £100 interest earned, £20 was automatically taken off as basic-rate tax, and higher-rate taxpayers would later lose another £20 during tax self-assessment. From today it's all change...
The 7 personal savings allowance need-to-knows
1) All savings interest will be paid gross, ie, there'll be no tax taken off.
2) This works for ALL interest - not just savings accounts, but bank accounts, credit unions & peer-to-peer savings. However share dividends aren't included.
3) Basic 20% rate taxpayers can earn £1,000/yr interest tax-free.
4) Higher 40% rate taxpayers can earn £500/yr interest tax-free.
5) Top 45% rate taxpayers don't get a PSA, so all interest is taxable.
6) Cash ISAs, premium bonds and other tax-free savings interest DON'T count towards the £1,000 (or £500) limit so you can get this interest too.
7) If you earn interest over the limit, you pay tax at your income tax rate, but only on the amount over the limit.
To put this in context, in the top easy-access savings account which pays 1.3% you'd need to save a whopping £75,000 to generate £1,000 interest; this is why 95% of people now won't pay tax on savings.
For a full Q&A on how it works see personal savings allowance help. For what's a 20% taxpayer, see my when earning more pays less blog. The NEW savings fountain - earn max interest
 As for most people tax is no longer an issue with savings, where you should have your cash has changed. It's now usually simply a question of where you can earn the most interest. So first, CHECK YOUR SAVINGS TODAY, find what they earn... you'll be shocked, rates have plummeted.
Then follow my savings fountain below. The idea is you put money in each level, and if it's full, you overflow to the next. This way you max out every penny. ALL savings mentioned here have the full UK £75,000 savings safety protection unless stated. | | | | Before you start | Repay costly debts and possibly mortgages. £1,000 on a typical credit card costs £190/yr interest, £1,000 in easy-access savings earns £13/yr, so clear the debt with the savings and you're £177/yr up. Some will think "I need savings in case of emergencies", yet that can be a mistake. See my should I repay my debt or save? guide for why.
With mortgages, look if your mortgage rate is higher than the rate earnable on savings and consider paying it off instead. See my should I overpay my mortgage or save? guide for full pros & cons and use the overpayment calc to work out the gain. | | | Level 1:
Top tier | Help to Buy ISAs: FREE 25% added to first-time buyer savings. For anyone 16+ who's never owned a home and may want to, these are usually a no-brainer. This is because as well as interest you can use it towards a mortgage deposit and 25% is added on top, up to a maximum of a free £3,000. Full FAQs & best buys in Top 4% Help to Buy ISAs. | | | Level 2:
Top for lump sums | Earn 5% now tax-free & easy access via bank accounts. Some accounts offer high in-credit savings rates to entice switchers - it's the only way to earn decent interest on decent amounts.
- Bigger savers earn 3%: Santander 123* pays 3% AER variable if you've £3,000 to £20,000 in it. It has a £5/mth fee, but for most that's easily covered by the up-to-3% cashback you get if you use it to pay your bills, eg, council tax, energy, broadband (min pay-in £500/mth).
Even without that, and including the fee, it's the top deal if you've £7,000+ saved. Couples can have 3 accounts between them covering £60k (one each & a joint). See my is Santander 123 worth it? blog. The interest is so good that for higher 40% rate taxpayers if you max one out you'll be over your PSA limit (so then ISAs below look good).
- Up to 5% for smaller savings: TSB Classic Plus* pays 5% on up to £2,000 and up to £5/mth cashback on contactless card spending, Nationwide FlexDirect* is 5% on a slightly bigger £2,500 but only for a year. Club Lloyds pays 4% on £4,000 to £5,000 (but you need to pay in £1,500/mth). Alternatively check out £100 bank switching bonuses.
- Can anyone get these accounts? You usually need to pass a credit check, meet monthly min pay-ins & set up two direct debits. Full info incl eligibility criteria in Best Bank Accounts.
- Can I open more than one? Yes, see the 5% Savings Loophole. | | | Level 3:
Top for monthly saving | Earn up to 6% with regular savings accounts. These pay high interest but only on small amounts, generally for a short time. They're great for, er, saving regularly, but you can also trickle lump sums in there too.
- The top payers are 'bank linked'. So you need a specific current account to open them; luckily those accounts tend to be best buys. First Direct* gives £100 to switchers and is no.1 for customer service (you need to pay in £1,000/mth or there's a fee) and it has a linked regular saver letting you put up to £300 a month in at 6% AER fixed.
Other top payers include M&S Bank and HSBC, plus all the 'level 2' accounts above have linked regular savers too paying 4%+.
- Anyone can earn 3.05%. The top non-linked account is Leeds BS Regular Saver at 3.05% AER variable, if you pay in £50 to £250 every month. Full info in Top Regular Savings Accounts. | | | Level 4:
Only for bigger savers | New £15,240 cash ISA allowance - 1.85% tax-free. A cash ISA is just a tax-free savings account and as it's the new tax year, you've a new £15,240 allowance. Crucially interest from this doesn't count towards the £1,000 (or £500) PSA limit - so it's good if you'll earn more.
Full help on who should & shouldn't get them in my Is it time to ditch cash ISAs? guide. Full best buys in Top Cash ISAs, briefly...
- Top Easy-Access ISAs: If you want to withdraw any time, Coventry BS is 1.4% AER variable for new money only. To also transfer in poorly-paying old ISAs, Yorkshire BS pays 1.35% AER variable but only allows 3 penalty-free withdrawals a year.
- Earn more in fixed ISAs. Here the rate is fixed. You're supposed to lock cash away, but unlike normal savings fixes, they have to allow you early access to your cash, but can charge you some interest. The Kent Reliance 1yr fix is 1.45%, Bank of Cyprus UK 2yr is 1.7% and 1.85% for three years.
PS: There's a new Junior ISA or Child Trust Fund £4,080 allowance tax-free from today. Click the links for full help and info. | | | Level 5:
If you can lock cash away | Earn up to 2.78% in fixed-rate savings. These pay more than normal savings, and the rate is certain, but you can't withdraw early. Full help and best buys in Top Fixed-Rate Savings, in brief...
- The top straightforward fixes: Top 1yr is Charter Savings' 1.91% AER (min £1k), State Bank of India is 2.2% for 2yrs and 2.35% for 3 (min £10k). Both are fully UK savings safety protected.
- Earn more (probably) in top sharia banking fix: Al Rayan Bank pays 2.17% over 18mths and 2.78% over 2yrs. I say "probably" as Islam bars interest, so it's an 'expected profit rate'. It's never not fully paid out, but by definition isn't certain. Not a bad bet though; anyone can open it, & it's UK savings safety protected.
- Earn more but not UK-protected: Fidor Bank pays 2.45% for 3yrs, but it's German-protected to a similar amount (up to €100,000), so in the unlikely event it went bust you need to consider that you are reliant on the German govt to bail you out. | | | Level 6:
Top normal savings | Earn up to 1.45% easy access. The most flexible savings, allowing big amounts and withdrawals whenever you need. Rates are variable, so once you get 'em, keep an eye on 'em. Full best buys in Top Savings.
- Top straightforward deal: Yorkshire BS pays 1.3% (min £100) but only allows 1 penalty-free withdrawal a year. For unlimited withdrawals NS&I pays 1.26% (min £500), though the rate's dropping in June, and State Bank of India is 1.25%.
- Use the top cash ISA as the rate's higher: The top easy access ISA from Coventry BS pays 1.4%. So unless you need your ISA allowance for something else, use it as an easy access savings - even if you won't gain from the fact it's tax free, you will from the fact it pays more.
- Earn more but not UK-protected: RCI Bank at 1.45% easy access, with unlimited withdrawals, is topping many best-buy tables, but that's not the full story: it's French-protected to a similar amount (up to €100,000). So in the unlikely event it went bust you need to consider that you are reliant on the French govt to bail you out. Not necessarily a problem, but it is worth knowing before deciding. | | |
| | | | | | | | | | | | | | | | | | The marriage tax allowance is a no-brainer - yet 3m+ eligible couples still aren't claiming & now it's worth more
No apologies for nagging. This is easy free cash, yet many wrongly think "it isn't for me". Not true, just read our free cash for married couples guide. And if it's not for you, you'll surely know someone who fits the bill so SPREAD THE WORD... -
 Who qualifies? Are you A) under 81? B) married or in a civil partnership? C) Is one of you a non-taxpayer, ie, usually earning £0 to £11,000? D) Is the other a basic 20% rate taxpayer, ie, usually earning £11,000 to £43,000? If so you qualify. Do note just living together, even if you've kids, doesn't count - the Govt's aim is to 'reward marriage'.
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It's NOW worth £432. The marriage tax allowance (MTA) started on 6 April 2015, and in year 1 was worth £212. For the new tax year starting today, it's worth £220. Plus claim it now and it's backdated so many get last year's AND this year's allowance - £432. -
It works by transferring your tax-free personal allowance. The standard personal allowance is now £11,000. This is the amount you can earn without paying income tax. The MTA lets the non-taxpayer transfer 10%, ie, £1,100 to their taxpaying spouse. So the taxpayer now has £1,100 of income they would've paid 20% tax on that's now tax-free, a £220 annual gain. Anne emailed us: "Applied and within one week we had received a tax refund and revised tax codes. Still amazed. Many thanks." -
It takes minutes to apply. It's really easy, see our quick application help: the key rule is the NON-taxpayer must be the one who applies for it. Doreen emailed us: "Great to get £212 refunded from HMRC on marriage allowance. One phone call, easy peasy and already received." Plus see how to get last year's money as a lump sum. -
Stop trying to think of reasons you don't qualify. We're swamped with people asking things like "I'm a volunteer, am I excluded?" or "my income's from my pension, does that count?" Stop overcomplicating it; if you don't pay tax and are married to someone who pays 20%, you're in. Questions? See the full Marriage Tax Allowance guide. | | | | | | | | | | | | | | | If you've got credit or store card debts, you could save £100s or £1,000s - yet go quick as a top deal's ending
A balance transfer is where you get a new card that pays off your old card(s) so you owe it instead, but at a far cheaper rate. The lower rate means more of your repayments clear the actual debt rather than just servicing the interest making you debt-free quicker. Last week there were three 40-month 0% deals, one's already gone, another closes Monday... The top new-cardholder 0% balance transfers
DON'T JUST APPLY, that hits your credit file - find the cards you've best odds of getting via our FREE ELIGIBILITY CALC | | Card | 0% deal (REP APR AFTER 0% ENDS) | ONE-OFF FEE | Ends Mon. Halifax* - longest 0% with lowest fee
| Up to 40mths 0% (18.9%) | 2.58% | | Tesco* - longest 0% that isn't an 'up to' length (eligibility calc N/A) | 40mths 0% (20.6%) | 2.69% | | MBNA* - long 0% with pre-approval via eligibility calc | Up to 39mths 0% (20.9%) | 2.98% | | Barclaycard* - long low-fee card | Up to 32mths 0% (18.9%) | 0.72% | | Halifax* - longest NO-FEE 0% card | Up to 23mths 0% (18.9%) | None | | AA* - longest NO-FEE 0% card that isn't an 'up to' length | 22mths 0% (19.9%) | None |
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Tip 1: Go for the lowest fee in the time you're sure you can repay. Most balance transfers charge a one-off fee of the amount shifted, eg, 2.58% is £25.80 per £1,000. So calculate how long you'll take to clear the debt, add a bit for safety, then pick the lowest fee within that time. Unsure? Play safe and go long, even with a bigger fee. -
Tip 2: Find which cards you're most likely to get. Applications leave a mark on your credit file, even if rejected. Our eligibility calc shows which cards you've best odds of getting, so you can home in on your top deal, protecting your credit file. Simon told us: "Owed £2,555 paying £90/mth interest. Used your calc and got 37mths 0%. Saved a fortune." [Roughly £3,300 by the time the 0% ends.] Plus for a few cards, the lender provides enough info so we can tell some people they're 100% pre-approved for that exact deal, subject to passing its ID & fraud check. -
Tip 3: Some 0%s are 'up to', so some get a shorter deal based on credit score. We include the best non-'up to' options above. If you've good odds of these in the eligibility calc they can be worth it as you get more certainty. -
The Balance Transfer Golden Rules. Full help & ALL best buys: Balance Transfers (APR Examples), in brief...
a) Never miss the min monthly repayment or you can lose the 0% deal and it'll cost far more.
b) Clear the card or balance transfer again before the 0% ends, or the rate rockets to the rep APR.
c) Don't spend/withdraw cash on these. It usually isn't at the cheap rate & cash withdrawals hit your credit file.
d) Unsure which to pick? Use our Which Card's Cheapest? tool. | | | | | | | | | They can get this email free every week | | | | | | | | | This new hot cashback deal from BT-owned Plusnet slashes £200/yr-ish off typical b'band & phone costs
If you've standard broadband with BT, Sky, Virgin or TalkTalk, you pay £300-£450 a year all in. It's 'all in' because you pay for the phone line too, even if you don't want it, so to compare always include its cost (most adverts don't). The key to getting cheap broadband is to pounce on short-lived hot promo deals, or haggle based on them. This is the latest... -
 New. Broadband & line £136 for a YEAR. Ends Tue. This is a 1yr contract with BT-owned Plusnet* for standard, up-to-17Mb speed b'band. Its customer service rating is 62% 'great' in our poll, which is top. And 90% of the UK is eligible, but if you already have Plusnet, or left it recently, you're excluded. To get it...
1. Sign up . Go via Plusnet* before 23.59 on Tue 12 Apr.
2. Pay line rent upfront if you can afford to. It's cheapest if you select to pay £185.88 for the year's line rent upfront (equiv £15.50/mth). If not it's £16.99 each month.
3. Broadband's 'free' during the 1yr contract. If you stay after, it's £9.99-£17.49/mth (depending on location).
4. There's £50 cashback, but you must claim it. Use the special link above and within 10 working days of activation you'll be emailed a link to a form to fill in for the £50 cashback, which will then arrive within 30 days. PS: If you've ad- or cookie-blocking software, turn it off or the deal mightn't track; check your email's spam folder if it doesn't arrive.
How it stacks up: Excluding calls, the total price is £136/yr after cashback, equivalent to just £11.30/mth. Pay line rent monthly it's £154/yr, equivalent to £12.80/mth. Compare that with BT's £17.99/mth standard line rent alone.
- What about calls? No calls are included but in general its UK call costs are mostly slightly cheaper than BT (see Plusnet call costs).
- No line/switching from cable (or in a few cases, Sky cust)? Installation's £49.99. You'll know before committing.
- Need a router? There's an optional 'free' one available, though Plusnet charges £6.99 p&p.
- Anything cheaper? There is a TalkTalk deal which gives a high st voucher; if you were to count that as cash it does undercut this, but in our last customer service poll TalkTalk was bottom with 47% 'poor'.
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Cheapest superfast fibre broadband £254 a YEAR. If you want something with more speed, the current leader is Virgin's fibre b'band & line rent £254 over 12mths. For our full best-buys see Cheap Broadband. | | | | | £7 full school uniform. If they've grown and you need it for the new term, see our cheapest school uniform round-up.
Free Ascot race day grandstand tickets. For Wed 27 Apr. 5,000 avail. Similar tickets norm £14-£25. Cheaplechase
SUCCESS OF THE WEEK: (Send us yours on this or any topic)
"Your website and emails helped me reclaim PPI of over £25,000 on my parents' loan & credit card accounts, despite them being wrongly declined previously. You'll never understand the stress you've taken away from my father - a huge thank you."
Microchip your dog or risk a fine. A reminder the new law's in effect from today. Microchip your dog for FREE | | | | | | | | | Have you had a payday loan since Jan 2015? The law on payday loans was tightened up last year. Now Citizens Advice has launched a survey to understand why people still take them out. If you've had a payday loan since Jan 2015, take its survey to tell it your experience (sorry, GB only). For more info on payday loans - and much better alternatives - see our payday loan guide. | | | | | | Will you miss your local library if it's shut down? Do you love your library or not even know where it is?
The results are in - the UK retailers you LOVE and LOATHE the most are... drumroll please. Of the 16,615 votes it was Aldi that got the most love with 32% choosing it, followed by Amazon with 29%. Cheap isn't always cheerful though, as Primark was most loathed. It just pipped Currys/PC World and Tesco to the bottom spot with 18% of the total vote. Perhaps worse than being loathed or loved is indifference: Superdrug attracted fewest votes - just 3% of the total cast. | | | | | | | | | | | | | | | | | | | | | | | | | | | Thu 7 Apr - Good Morning Britain, ITV, Deals of the Week, 7.40am. Watch previous
Fri 8 Apr - This Morning, ITV, Martin's Quick Deals, from 10.30am. Watch previous
Mon 11 Apr - This Morning, ITV, Money Monday, from 10.30am. Watch previous
Mon 11 Apr - BBC Radio 5 Live, Lunch Money Martin, 12noon. Subscribe to podcast | | | | Wed 6 Apr - Share Radio, 11.20am
Thu 7 Apr - BBC Radio Manchester, 4.20pm
Tue 12 Apr - BBC Radio Cambridgeshire, 2.20pm | | | | | | | Q: I was shopping in an outlet store when I saw a sign saying "all items are sold as samples, and sold as seen. Please check your purchases carefully as they are non-refundable." Surely you can get a refund if it's defective/doesn't last for a reasonable time? Neil, via Twitter. MSE Megan's A: Yes you can get a refund if it's defective or doesn't last for a reasonable time. Just remember our SAD FART rule, when you buy goods they must be - Satisfactory quality, As, Described, Fit for purpose, And last a Reasonable length of Time. This rule applies whether you've bought items at an outlet store, in a sale or even second-hand. So a sign saying "non–refundable" is meaningless if the item is faulty, not as described or not fit for purpose. You cannot, however, take it back just because you no longer like it. Under the Consumer Rights Act 2015 you have a 30-day right to reject a faulty item and get a full refund in most cases. This would only change if the sign pointed out a specific problem with the item before you bought it, which this doesn't seem to do. Also, when buying seconds you may have to accept that the satisfactory quality is less than normal. You need to use a bit of common-sense here though. So if the zip breaks on your new jumper within a few weeks it has obviously not lasted a reasonable length of time, but if you try arguing this after a year you're unlikely to win. See Consumer Rights for more. Please suggest a question of the week (we can't reply to individual emails). | | | | | | | That's it for this week, but before we go, check out this thread from the forum: "How much money would it take to make you happy?" Could more money make you happy? Join in as our forumites discuss the figures that would let them enjoy life. For some it's half a million and for others it's just enough to buy their sweetheart a bag of chips... We hope you save some money,
Martin & the MSE team | | | | | | |
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