Apologies for the confusion around the Gilt shown in the HL section. This isn't actually a Gilt but a Strip instead and is subject to tax however the principle applied in the calculations are still appropriate to Gilts that you buy at a discount. No CGT applies.
Thanks for the clarification. Presumably there is no point in using a GIA for this strategy as the gilt interest would be taxable even if the profit at redemption isn’t subject to income tax or CGT?
In the 1990s I sold pensions on the strenght that the tax free lump sum would pay off most if not all of the mortgage and leave the investor with a pension for life. Most were over a 40 year term plus, I was not alone.
The approach of selling pensions with the promise that a tax-free lump sum would pay off mortgages and provide a lifelong pension was common in the 1990s. However, many factors can affect the outcome, including changes in the housing market and interest rates. It's crucial for investors to seek personalized advice and consider diversified financial strategies to ensure long-term financial stability.
it's vital for investors to seek personalized advice and adopt diversified financial strategies. Working with a knowledgeable financial adviser is crucial for achieving long-term financial stability and freedom
I've experimented with a few over the past years, but I've stuck with ‘’Nicole Anastasia Plumlee” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
thats the endowment mortgage right? We had an adviser recommend that and he used the maximum possible stock market return to calculate projected returns - which proved to be bad advice when 2008 came along and most funds failed to pay the principal!
Yes my advisor’s recommendation for an endowment mortgage didn’t work out well for me either. From the forecast of my mortgage paid off plus a nice cash sum also, the reality was neither, with me having to make up the shortfall of thousands of pounds.
These frequent tax code changes are disrupting my long-term investment strategies. Are there ways to structure my investments to be more resilient to potential tax code modifications?
I honestly think America needs a completely restructure of their political system. It is just not working. Trump and Biden being elected out of 300 million people to run the country is evidence for that too.
This is why the US should elect more progressive politicians, who know how to manage budgets and give us (yes, pur country's initials literally spell out that pronoun) much better tax credits in return for better public education and better public healthcare. but since these are nonexistent, my husband and I are being guided to finance our retirement and healthcare through a diversified investment portfolio
@@hasede-lg9hj How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes...
@@Richardnnabuikediyoke That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
@@Richardnnabuikediyoke The crazy part is that those advisors are probably outperforming the market and raising good returns but some are charging fees over fees that drain your portfolio. Is this the case with yours too?
I see the rising interest rate as a very big problem, as more investors will definitely pull out more money from the Stock market. This might have worked when I was still invest-ing with a couple thousand dollars, but it is more difficult now to decide whether to pull out more than $365k from my port-folio. I know some inves-tors still make that despite the strong bear market. In wish I could pull that feat
I think the whole thing about holding stocks for long term will always apply. So I think you should get a quality broker who is able to analyze and pick stocks that will do well in the long term, else you will be in a long bear ride.
You have a very valid point, I started investing on my own and for a long time, the market was really ripping me off. I decided to hire a broker, even though I was skeptical at first, and I beat the market by more than 9%. I thought it was a fluke until it happened two years in a row, and so I’ve been sticking to investing via an analyst.
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
It’s a rip off interest rates that don’t keep up with inflation and your money still devalues every year and then they tax you on the interest. Thanks for those tips
Excellent explanation of how to minimise tax on savings . Mention of short dated government bonds was particularly useful - I didn’t know about that. 0:200:20
When the interest rates were very low for years like you said, I put in a fixed saving account for 5 years. And receiving the interest of about £2500 over 5 years, thinking it is only £500 per year for each year of the Personal Saving Allowance of £1k per annum. Wrong! I was allowed £1k tax free and the rest was taxed by HMRC. Nobody told us that we should withdraw interest every year to avoid income tax until too late. This can still happen to people fixing their Saving years and withdrawing interest in the end thinking of compound interests will be tax free. No, Very annoying! Carl please tell people that esp. with bigger fixed saving earning bigger than £1k interest per year for Basic Tax payers. It still hurts.
interest is taxed in the year it's received so I guess that your interest was paid in one go at end of the 5 years, so in that year you received all 2,500. But some products do pay the interest annually or monthly.
Thanks for this, I just got a letter from HMRC regarding tax on the interest earned, the effective interest rate is less impressive after the tax taken. So I need to take some action.
Very well explained and covers all the sensible options. I think you should have pointed out that if you transfer to stocks/shares instead of cash, you could pay tax on dividends and/or capital gains tax when you sell, especially as the limits for both have reduced.
Most people save a portion of their income, which has already been taxed! Why would you be taxed on the interest? The government encourages people to try and save money, but they shouldn't tax you after you've already paid interest!
Most Tax is Theft, Starmer said in an interview a few years back that he only regarded Those people with OUT savings as working class, He is going to squeeze anyone with savings until the pips sqeek, get your money sorted now! Thank you for the video I have subbed
@jeremyhares979 Too much. But this a hole is on another level, he wants my money to buy his votes from the unions, as demonstrated by his ridiculous give away of £5 Billion to train drivers and junior doctors, he is a dyde in the wool communist who will not happy until he bleeds us dry.
I discovered some of these measures completely by accident and as far as I'm concerned HMRC and the government are sailing close to the wind of swindling. Most people have no idea. The people should simply complete their declarations of income and HMRC should calculate all the allowances from that, not the other way round as is, but that's not what happens. I abhor the whole rotten system. Thank you Carl for this brilliant explanation and in the way you have provided it. It would be grate if you could provide an email address. Thank you.
Thank you for the video and information about paying the correct amount of tax. There is no _avoiding_ paying tax, but advisors show people how to pay the correct amount. There are ways to pay the *_correct amount of income tax_* , not _avoid paying income tax_ .
I seem to remember that tax avoidance is legal but that tax evasion is illegal. Edit: Having checked, I see that tax avoidance will get more and more difficult, and less and less ethical, the wealthier you become. But it's easy, and equates to only paying what you're supposed to, if you don't mind staying just comfortable.
@@user-yq2wk6yg8s Quite right. Nevertheless, in my view, you do not avoid paying tax when you pay the whole amount of what is due for your circumstances. I think if more people learnt about finances, including myself, fewer people would complain about rich people paying the minimal taxes they owe because they too would be taking the same actions.
Great video, many thanks. Subbed and the bell has been hit! This year, 24/25, will be my first year where I go over the £1000 threshold for savings interest and therefore will be liable for tax. (Maxed out ISA etc) I am currently receiving the full new state pension and am employed full time. However, in December I am retiring and heading off overseas for a long time, maybe permanently???? I have been through gov.uk and HMRC but still have no idea how to make sure any tax is paid and I don't have any unpleasant surprises. (The tax should only come to £70/80 so I might as well get it out of the way) I have a spreadsheet detailing all interest received. I would greatly appreciate your advice on how to get this sorted. Many thanks in advance. Simon.
I have a 3 year fixed term savings account and am a basic rate tax payer. Interests are paid annually and are just under £1000. I’m now in year 2 and will change jobs in January, making me a higher rate tax payer. Is there anything I can do to avoid paying income tax on interests over £500 and how do I treat the partial year of interest for tax calculations? The savings account was opened in July.
Things appear strange right now. The value of the US dollar is declining due to inflation, but it is increasing in comparison to other currencies and commodities such as gold and real estate. People are flocking to the dollar because they believe it is safer. I'm worried that rising inflation will cause my retirement funds to lose value. What else could we do with our money?
Personally, I would say have a mentor. Not sure where you will get an experienced one, but if your knowledge of the market is limited, it seems like a good bet.
I agree to successful on investment. Having an investment advisor is the best way to go about the stock market right now. I was going solo, but it wasn't working. I've been in touch with an advisor for a while now, and just last year, I made over 80% capital growth minus dividends.
Great ...... I forgot that premium bonds are tax free and gilts strategy you mention I am definitely going to do. I never looked at it from that perspective 😊
The UK Treasury strip that supposedly would return 7.2% is not actually available to buy on HL. It can perhaps be purchased elsewhere but certainly not at that price.
HL wont trade strips, and I cant find anyone who will for a retail investor, I understand the banks will, if you are a member of their Wealth accounts and you will punt over £500,000. So I think this video is misleading.
Saving is for suckers. Do what that the upper class do, study and buy investments, property and shares that at least keep their value with inflation or out grow it (profit). Property = land, buildings, precious metals, etc. Or an index fund. Inflation is a hidden state tax to steal savings, they don't want you to invest money. Retired, age 58.
My electricity consumption was high for the past few months..mainly due to the use of 2 dehumidifiers due to the weather. Thankfully it's summer and I can do some of my lightweight laundry by handwash to cut costs. 😅
I thought the money that people had saved up. Had already been taxed and the remainder. was yours . How many times do they want to tax YOU before they had taken it all .
Question - my wife only has about 4k income from small private pensions so nowhere near her personal tax allowance. Is she liable for tax on her savings interest if it exceeds £1k?
any guidance for not having savings in the first place? I know enough to understand that currency that isn't moving is losing buying power every second anyway but I don't know enough to know where to put it, for example into gold or stocks etc
Enjoyed that, thank you. Interesting listening to UK tax advice and comparing it to Australia. I presume your audience is mortgage free, as a sensible place to put our $ is in offset accounts...
Thanks for the video. Please can you clarify the tax position for UK Strips? You have shown a Strip with coupon of 0.25% and potential 7.2% capital gain. Is this Strip subject to CGT?
I’ve pinned a comment at the top. In the video I didn’t realise it was a strip. Strip gains are subject to Income Tax but the principles for normal gilts with low yield at a discount still apply. No CGT.
Sir,I regularly change banks for the "switch fee" how is this switch fee viewed for tax purposes,on occasions I have had up to 3 payments of £175.00 in a tax year (£510.00 per tax year )
Please excuse my question if it sound silly as I am totally new to this. How do you know the gilt you mentioned for £92.80 in the example will mature at £10 in 2025?
@daveworthing2294 no, it can - and it it nothing to do with "work", just "income", which aren't as related as you might imagine. You get 12570 in the nil rate income tax band. Then you get 5000 starting rate for savings. Then you get the same personal savings allowance as every other basic rate taxpayer does. [Edit: which is 1000]
It’s stupid saying we shouldn’t hold cash and put it into shares if the world economy tanks so will the shares and uk finances are very closely linked !
Very interesting and clearly presented, many thanks. I retire at the end of this month and will receive my tax free lump sum some time in August. I have plans for it in the next year or so but need somewhere safe to put it in the meantime. I was considering a NSI savings account on the basis that whilst not the best interest rate out there (nor tax free), it is 100% backed by the uk treasury, hence about the safest place I can think of. I have considered maxing out on premium bonds for a proportion of it, but there is no guarantee of any return from those and the NSI savings would at least keep my money more or less abreast with inflation at today's rate. 🤔 What are your thoughts on this option?
Very sensible. Anything involving gambling will just lose out. Pay your taxes and be a good citizen not like the money grubbing Tory party of the last government.
Why is the savings interest not index linked to protect against depleting value of money. The Taxable rate should be = Interest rate earned - inflation rate.
Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account.
Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retirement.
Both have their perks but you can also save for retirement outside of a retirement plan, such as in an individual investment account or employing the services of a retirement planner/investment advisor.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
Finding financial advisors like Marisa Breton Dollard who can assist you on things like investing, insurance, making sure retirement is well funded, going over tax benefits, ways to have a volatility buffer for investment risk would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Can you confirm if I have this right regarding the pension carry forward rule? If I earn over £60,000 that means that this year and last year I can pay up to £120,000 into my pension including employer contributions. Let's say over those two years I only pay in a total of £40,000 does that mean in the next tax year, if the rules stay the same, I could pay in the £80,000 shortfall and the £60,000 for that tax year even if in that tax year my earnings are say just £70,000. Basically if I come into some money , an inheritance or a premium bond win etc, can that be used to plug the shortfall from previous years or do you have to earn the money via PAYE.
You will only get tax relief on pension contributions up to 100% of gross income in the same tax year regardless of how much carry forward is available.
Hi Carl, if I sell my house when I retire so that I have a big lump sum from the house sale as well as the pension, should I open several new bank accounts because of the £85,000.00 Safe amount of a bank collapses?
Great video!. I'm confused on how guilts can help. I have around 2 million in savings spread across many UK bank accounts. I already contribute my maximum to my pension to bring my taxable earnings down to near the personal allowance. Unfortunately my savings takes me over the 100K threshold. I have maximum premium bonds and all my isas are used. How could guilts or anything else help here please to reduce down so I'm not paying the 60% effective rate?.
You could move some of your savings into gilts that pay a very small interest rate and are discounted. Rather than pay tax on a larger interest rate with savings you might still pay a tiny amount of tax on the small interest from the gilt. The majority of the return will come from the capital gain from the gilt and that is not subject to CGT.
Potentially an option if you understand them and have maxed out other wrappers first. You need an exit plan though as most VCTs are difficult to sell without large penalty.
Indeed, Google “DMO Tax strips” . All the gains on strips are taxed as income, negating the benefit stated. To avoid this use low coupon gilts like T26, the increase in value of those isn’t taxed at all, you just pay tax on the small coupon element.
Great video. Spot on. Thank you. On many people’s minds at the moment. One question: how do we set about buying gilts? I have an AJBell account. Can they help?
Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account. I'm now seeking best possible areas or ways to gain wealth in today's economy.
Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retirement.
Both have their perks but you can also save for retirement outside of a retirement plan, such as in an individual investment account or employing the services of a retirement planner/investment advisor.
Private investing is the best way to go about the market right now, especially for near retirees, I've been in touch with a wealth manager, netted 370K the last downturn, made it clear there's more to the markets than we average joes know.
I have a decent amount in savings and £20,000 in an ISA , but only income is a small private pension of £606 every four weeks, how much interest can I make per year before paying tax? Thanks in advance.
Question: If I made £1200 in one tax year from saving accounts and £900 of it was from ISA account but £300 from other saving accounts. How much Tax do I pay if at all?
@@carlrobertsifa Thank you for your answer. Another question: If I make £1200 profit in one tax year but all of it is from none ISA saving accounts do I pay 20% tax from the whole £1200 or 20% from only £200 that exceeded the allowance?
So, if you earn over £51000 or earn £48000 and get interest of £5000....if you put money into your pension, lets say £10000 gross, including the tax relief element, do you then still get the £1000 savings allowance rather than £500, and do you pay tax on the savings at 20% rather than 40%? Similarly, if you earn £50000 and £5000 interest, if you put £40000 into a pension, does that mean you pay no tax on the interest at all?🤨
Only if you put the money into your pension by salary sacrifice, then how your thinking works. E.g your salary is £52,000 if salary sacrifice £10k then tax man sees it as a salary of £42K, ie your in the 20% tax bracket so interest earned on savings upto £1,000 is allowed.
Take your money out of the banks as its not really yours buy silver and gold and where does it say in law you have to pay tax in the first place tax office couldnt find anything
I struggle to believe that many / most individuals who have a tax liability on interest received actually declare it to HMRC. After all, how many individuals who SHOULD do a self assessment return actually do one, and with full disclosure.
Hi all Just to clarify matters given I've been sent my interest / tax for the 2023/2024 year. I'm due to pay £52.80 I have two options a) pay outright b) in the 2025/2026 tax year it is taken off in 12 installments from my pay. Hope this helps matters undertand how and when it goes out / paid
It’s no wonder the tax take on savings has gone up coz the interest rates have improved since last year. This means more savers are exceeding their allowance.
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Apologies for the confusion around the Gilt shown in the HL section. This isn't actually a Gilt but a Strip instead and is subject to tax however the principle applied in the calculations are still appropriate to Gilts that you buy at a discount. No CGT applies.
Thanks for the clarification. Presumably there is no point in using a GIA for this strategy as the gilt interest would be taxable even if the profit at redemption isn’t subject to income tax or CGT?
Are you sure it can be bought at the price shown in the video? HL state it can only be sold and the LSE quote at 95 not 92.8
If you voted for Labour, you are part of the problem
I checked the HL web site, ostensibly the price is £92.80 but the green dealing button is off. Can you buy it.
Called HL and they do not trade Strips any more. Shame
In the 1990s I sold pensions on the strenght that the tax free lump sum would pay off most if not all of the mortgage and leave the investor with a pension for life. Most were over a 40 year term plus, I was not alone.
The approach of selling pensions with the promise that a tax-free lump sum would pay off mortgages and provide a lifelong pension was common in the 1990s. However, many factors can affect the outcome, including changes in the housing market and interest rates. It's crucial for investors to seek personalized advice and consider diversified financial strategies to ensure long-term financial stability.
it's vital for investors to seek personalized advice and adopt diversified financial strategies. Working with a knowledgeable financial adviser is crucial for achieving long-term financial stability and freedom
I've experimented with a few over the past years, but I've stuck with ‘’Nicole Anastasia Plumlee” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
thats the endowment mortgage right? We had an adviser recommend that and he used the maximum possible stock market return to calculate projected returns - which proved to be bad advice when 2008 came along and most funds failed to pay the principal!
Yes my advisor’s recommendation for an endowment mortgage didn’t work out well for me either. From the forecast of my mortgage paid off plus a nice cash sum also, the reality was neither, with me having to make up the shortfall of thousands of pounds.
These frequent tax code changes are disrupting my long-term investment strategies. Are there ways to structure my investments to be more resilient to potential tax code modifications?
I honestly think America needs a completely restructure of their political system. It is just not working. Trump and Biden being elected out of 300 million people to run the country is evidence for that too.
This is why the US should elect more progressive politicians, who know how to manage budgets and give us (yes, pur country's initials literally spell out that pronoun) much better tax credits in return for better public education and better public healthcare. but since these are nonexistent, my husband and I are being guided to finance our retirement and healthcare through a diversified investment portfolio
@@hasede-lg9hj How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
Annette Marie Holt is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes...
@@Richardnnabuikediyoke That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
You can look her up online
@@Richardnnabuikediyoke The crazy part is that those advisors are probably outperforming the market and raising good returns but some are charging fees over fees that drain your portfolio. Is this the case with yours too?
Nah I Can't say I can relate, VICTORIA CARMEN SANTAELLA charge is one-off and pretty reasonable when compared to what I benefit in returns.
I see the rising interest rate as a very big problem, as more investors will definitely pull out more money from the Stock market. This might have worked when I was still invest-ing with a couple thousand dollars, but it is more difficult now to decide whether to pull out more than $365k from my port-folio. I know some inves-tors still make that despite the strong bear market. In wish I could pull that feat
I think the whole thing about holding stocks for long term will always apply. So I think you should get a quality broker who is able to analyze and pick stocks that will do well in the long term, else you will be in a long bear ride.
You have a very valid point, I started investing on my own and for a long time, the market was really ripping me off. I decided to hire a broker, even though I was skeptical at first, and I beat the market by more than 9%. I thought it was a fluke until it happened two years in a row, and so I’ve been sticking to investing via an analyst.
This sound interesting. I’m not really one to use pro analysts, but I guess it would not hurt to try one. My portfolio is in the red waters right now
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
It’s a rip off interest rates that don’t keep up with inflation and your money still devalues every year and then they tax you on the interest. Thanks for those tips
gold increased 30 % in the last year. savings accounts gave 5%. Make your choice.
Thanks but a video for retired people with savings would be good 👍
Agree, as I'm retiring in 2025.
Excellent explanation of how to minimise tax on savings . Mention of short dated government bonds was particularly useful - I didn’t know about that.
0:20 0:20
Thank you. I am hopeless when it comes to monetary issues - I don’t grasp figures easily- and so will have to watch again. Thanks for being here
That was all crystal clear. Knew some of it already but had it confirmed. Best of all, learned a few new things. Thank you! Liked and subscribing.
This is the most usefull discussion for UK pensioners, and would be pensioners.
This was extremely useful as i am having to retire soon on medical advice and
want to avoid greedy taxman making me pay tax twice.
When the interest rates were very low for years like you said, I put in a fixed saving account for 5 years.
And receiving the interest of about £2500 over 5 years, thinking it is only £500 per year for each year of the Personal Saving Allowance of £1k per annum.
Wrong!
I was allowed £1k tax free and the rest was taxed by HMRC. Nobody told us that we should withdraw interest every
year to avoid income tax until too late.
This can still happen to people fixing their Saving years and withdrawing interest in the end thinking of compound interests will be tax free. No, Very annoying!
Carl please tell people that esp. with bigger fixed saving earning bigger than £1k interest per year for Basic Tax payers.
It still hurts.
interest is taxed in the year it's received so I guess that your interest was paid in one go at end of the 5 years, so in that year you received all 2,500. But some products do pay the interest annually or monthly.
Ive been declaring my tax on my savings. Nearly £800 this year...i pay tax on everything. Looking forward to sitting down and watching this episode 🙂
Thanks for this, I just got a letter from HMRC regarding tax on the interest earned, the effective interest rate is less impressive after the tax taken. So I need to take some action.
Very well explained and covers all the sensible options. I think you should have pointed out that if you transfer to stocks/shares instead of cash, you could pay tax on dividends and/or capital gains tax when you sell, especially as the limits for both have reduced.
Most people save a portion of their income, which has already been taxed! Why would you be taxed on the interest?
The government encourages people to try and save money, but they shouldn't tax you after you've already paid interest!
Excellent.. more please. Very clear and concise
Most Tax is Theft, Starmer said in an interview a few years back that he only regarded Those people with OUT savings as working class, He is going to squeeze anyone with savings until the pips sqeek, get your money sorted now! Thank you for the video I have subbed
You are obviously forgetting the last 14 years , how much have the tories taken ?
@jeremyhares979 Too much. But this a hole is on another level, he wants my money to buy his votes from the unions, as demonstrated by his ridiculous give away of £5 Billion to train drivers and junior doctors, he is a dyde in the wool communist who will not happy until he bleeds us dry.
@@jeremyhares979
I discovered some of these measures completely by accident and as far as I'm concerned HMRC and the government are sailing close to the wind of swindling. Most people have no idea. The people should simply complete their declarations of income and HMRC should calculate all the allowances from that, not the other way round as is, but that's not what happens. I abhor the whole rotten system. Thank you Carl for this brilliant explanation and in the way you have provided it. It would be grate if you could provide an email address. Thank you.
Thanks for your comments. You can contact me via RTSfinancialplanning.co.uk
Regardless of how you see it the Taxman is a thief. Your annual income is after tax, yet you pay tax again when you save it. Isn't it double taxation?
Thank you for the video and information about paying the correct amount of tax.
There is no _avoiding_ paying tax, but advisors show people how to pay the correct amount.
There are ways to pay the *_correct amount of income tax_* , not _avoid paying income tax_ .
I seem to remember that tax avoidance is legal but that tax evasion is illegal.
Edit: Having checked, I see that tax avoidance will get more and more difficult, and less and less ethical, the wealthier you become. But it's easy, and equates to only paying what you're supposed to, if you don't mind staying just comfortable.
@@user-yq2wk6yg8s Quite right. Nevertheless, in my view, you do not avoid paying tax when you pay the whole amount of what is due for your circumstances.
I think if more people learnt about finances, including myself, fewer people would complain about rich people paying the minimal taxes they owe because they too would be taking the same actions.
Great video, many thanks. Subbed and the bell has been hit! This year, 24/25, will be my first year where I go over the £1000 threshold for savings interest and therefore will be liable for tax. (Maxed out ISA etc) I am currently receiving the full new state pension and am employed full time. However, in December I am retiring and heading off overseas for a long time, maybe permanently???? I have been through gov.uk and HMRC but still have no idea how to make sure any tax is paid and I don't have any unpleasant surprises. (The tax should only come to £70/80 so I might as well get it out of the way) I have a spreadsheet detailing all interest received. I would greatly appreciate your advice on how to get this sorted. Many thanks in advance. Simon.
Thanks very nicely produced video. It may need some revision following the next budget if the rumours are to be believed.
HL is not offering any more gilts. Where else I could buy gilt?
I have a 3 year fixed term savings account and am a basic rate tax payer. Interests are paid annually and are just under £1000. I’m now in year 2 and will change jobs in January, making me a higher rate tax payer.
Is there anything I can do to avoid paying income tax on interests over £500 and how do I treat the partial year of interest for tax calculations? The savings account was opened in July.
Excellent Information. Thank you
Things appear strange right now. The value of the US dollar is declining due to inflation, but it is increasing in comparison to other currencies and commodities such as gold and real estate. People are flocking to the dollar because they believe it is safer. I'm worried that rising inflation will cause my retirement funds to lose value. What else could we do with our money?
Personally, I would say have a mentor. Not sure where you will get an experienced one, but if your knowledge of the market is limited, it seems like a good bet.
Yes To be honest, investing is a smart way of securing your family future, grow wealth and beat inflation
That is true my dear, Investment is the best idea presently and without it, human struggles are worthless.
I agree to successful on investment. Having an investment advisor is the best way to go about the stock market right now. I was going solo, but it wasn't working. I've been in touch with an advisor for a while now, and just last year, I made over 80% capital growth minus dividends.
Please can you leave the info of your Investment advsor here? I'm in dire need for one.
Great ...... I forgot that premium bonds are tax free and gilts strategy you mention I am definitely going to do. I never looked at it from that perspective 😊
The UK Treasury strip that supposedly would return 7.2% is not actually available to buy on HL. It can perhaps be purchased elsewhere but certainly not at that price.
HL wont trade strips, and I cant find anyone who will for a retail investor, I understand the banks will, if you are a member of their Wealth accounts and you will punt over £500,000. So I think this video is misleading.
Thanks Carl, this all sounds like useful information.
Excellent summary ..thanks
Very good explanation, thank you
I learnt something here, GILTS are CGT exempt. Awesome!
Me too 😊
Same here and I've been investing for 40 years! Now that I've retired I'm looking for those little edges which this video delivers. Thank you.
He said that the Gilt interest are not tax free. The strategy he pointed out was buying Gilts at a discount, but mature at their full face value.
All a bit complicated for my mind but overall sounds good. I will have a look at my options. Thank you. 👍
Saving is for suckers.
Do what that the upper class do, study and buy investments, property and shares that at least keep their value with inflation or out grow it (profit). Property = land, buildings, precious metals, etc. Or an index fund. Inflation is a hidden state tax to steal savings, they don't want you to invest money. Retired, age 58.
My fear is that the government will disapply the personal allowance in relation to interest on non pension or ISA interest
My electricity consumption was high for the past few months..mainly due to the use of 2 dehumidifiers due to the weather. Thankfully it's summer and I can do some of my lightweight laundry by handwash to cut costs. 😅
How do you utilise your partners savings limits. I have input 20k into my ISA but my wife hasn’t got one
I thought the money that people had saved up. Had already been taxed and the remainder. was yours . How many times do they want to tax YOU before they had taken it all .
They are taxing you on the interest that you have earned
Thank you so much. Very informative.
Not sure that the tax treatment for gilt strips is the same as for gilts 🤔
Question - my wife only has about 4k income from small private pensions so nowhere near her personal tax allowance. Is she liable for tax on her savings interest if it exceeds £1k?
"A fair tax is every bit as absurd as a fair theft"
how do I go about buying gilts - could I do it through my building society? Is there a fee involved?
I am prepping for retirement next year and wondering about the £30,000 threshold. Would that mean a £30,000 pension income excluding State Pension?
You forgot to mention joint savings accounts, any interest earned is divided by two so it reduces individual interest earned.
Great point!
Thanks Carl, very clear and concise. Look forward to future videos. Also like your presentation style.
any guidance for not having savings in the first place? I know enough to understand that currency that isn't moving is losing buying power every second anyway but I don't know enough to know where to put it, for example into gold or stocks etc
That was a very useful video….thamk you
You can't purchase the UK Treasury Strip online that you used as an example with a Hargreaves Landsdown trading account.
Enjoyed that, thank you. Interesting listening to UK tax advice and comparing it to Australia. I presume your audience is mortgage free, as a sensible place to put our $ is in offset accounts...
Thanks for the video. Please can you clarify the tax position for UK Strips? You have shown a Strip with coupon of 0.25% and potential 7.2% capital gain. Is this Strip subject to CGT?
I’ve pinned a comment at the top. In the video I didn’t realise it was a strip. Strip gains are subject to Income Tax but the principles for normal gilts with low yield at a discount still apply. No CGT.
Thanks Carl 👍
Sir,I regularly change banks for the "switch fee" how is this switch fee viewed for tax purposes,on occasions I have had up to 3 payments of £175.00 in a tax year (£510.00 per tax year )
Very informative 👍👍
Where did you get the £100 maturity on UK Treasury Strip?
Great clear explanation. Please when making graphics avoid red green combinations. Thanks
Please excuse my question if it sound silly as I am totally new to this. How do you know the gilt you mentioned for £92.80 in the example will mature at £10 in 2025?
Very helpful indeed, thank you!
Thank you , some valuable information 😊
What about pensioners. Getting lower rate pension.about under 20000
Savings just asking to know for my friend.
Very useful. Can we have about gilts and more on cash pensions if you are 55+ can you use them as a pig bank so to speak.
Thanks.
open up a SiPP as there aren't any "admin" charges which regular pensions have
Sorry for being thick, but with regards the gilt example given at 13:25 in the video, how do you get that it matures at £100 in March 2025?
What about if living in Scotland? Are the rules the same for tax on savings ?
What is the pension allowance £60k. ? does this mean I can have a pension up to £60k before I pay tax on it ?.
Excellent video, very clear. Thanks
I thought that the whole personal allowance (£1000 plus £17,500) could come from interest, and be tax free, if you earned nothing.
It can.
No it can't. It's £5000 if you don't work.
@@daveworthing2294you still get personal allowance if you don't work
@daveworthing2294 no, it can - and it it nothing to do with "work", just "income", which aren't as related as you might imagine.
You get 12570 in the nil rate income tax band.
Then you get 5000 starting rate for savings.
Then you get the same personal savings allowance as every other basic rate taxpayer does. [Edit: which is 1000]
@@alan_davis You've got it wrong. It's £5000 from interest, then you'll pay tax. Personal allowances don't come into it.
Brilliant! Perfectly explained! Thank you so much!
I would disagree with you with regards your UK Treasury Strip not attracting tax. Strips are taxed on gains, not the same as Gilts
Good video! Would the 25% pension lump sum count as income for the starting savings rate in the year(s) you take it, or is it exempt?
No it doesn’t count as income.
What are the penalties when one day that money in an ISA or bond, is taken out?
It’s stupid saying we shouldn’t hold cash and put it into shares if the world economy tanks so will the shares and uk finances are very closely linked !
Very interesting and clearly presented, many thanks. I retire at the end of this month and will receive my tax free lump sum some time in August. I have plans for it in the next year or so but need somewhere safe to put it in the meantime. I was considering a NSI savings account on the basis that whilst not the best interest rate out there (nor tax free), it is 100% backed by the uk treasury, hence about the safest place I can think of. I have considered maxing out on premium bonds for a proportion of it, but there is no guarantee of any return from those and the NSI savings would at least keep my money more or less abreast with inflation at today's rate. 🤔 What are your thoughts on this option?
Very sensible. Anything involving gambling will just lose out. Pay your taxes and be a good citizen not like the money grubbing Tory party of the last government.
@@douglasfielder4621 Thanks for your feedback.
Thank you for very useful information.
I have a rented property with my wife. Can I transfer whole property to my wife without any tax?
Why is the savings interest not index linked to protect against depleting value of money. The Taxable rate should be = Interest rate earned - inflation rate.
Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account.
Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retirement.
Both have their perks but you can also save for retirement outside of a retirement plan, such as in an individual investment account or employing the services of a retirement planner/investment advisor.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
Finding financial advisors like Marisa Breton Dollard who can assist you on things like investing, insurance, making sure retirement is well funded, going over tax benefits, ways to have a volatility buffer for investment risk would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Can you confirm if I have this right regarding the pension carry forward rule?
If I earn over £60,000 that means that this year and last year I can pay up to £120,000 into my pension including employer contributions. Let's say over those two years I only pay in a total of £40,000 does that mean in the next tax year, if the rules stay the same, I could pay in the £80,000 shortfall and the £60,000 for that tax year even if in that tax year my earnings are say just £70,000. Basically if I come into some money , an inheritance or a premium bond win etc, can that be used to plug the shortfall from previous years or do you have to earn the money via PAYE.
You will only get tax relief on pension contributions up to 100% of gross income in the same tax year regardless of how much carry forward is available.
@@carlrobertsifa Thanks very much for confirming that for me 👍🏻
Hi Carl, if I sell my house when I retire so that I have a big lump sum from the house sale as well as the pension, should I open several new bank accounts because of the £85,000.00 Safe amount of a bank collapses?
Yes or use NSI which is 100% backed by government.
Great video!. I'm confused on how guilts can help. I have around 2 million in savings spread across many UK bank accounts. I already contribute my maximum to my pension to bring my taxable earnings down to near the personal allowance. Unfortunately my savings takes me over the 100K threshold. I have maximum premium bonds and all my isas are used. How could guilts or anything else help here please to reduce down so I'm not paying the 60% effective rate?.
You could move some of your savings into gilts that pay a very small interest rate and are discounted. Rather than pay tax on a larger interest rate with savings you might still pay a tiny amount of tax on the small interest from the gilt. The majority of the return will come from the capital gain from the gilt and that is not subject to CGT.
How does the average person go about investing in gold and what are the tax implications ?
Could do it via a fund or buy physical gold direct from the Royal mint.
@@carlrobertsifa I wold recommend Chards or Atkinsons bullion, they have better prices than RM.
Great video. What about Venture Capital Trusts though?
Potentially an option if you understand them and have maxed out other wrappers first. You need an exit plan though as most VCTs are difficult to sell without large penalty.
That's a strip (you described it as a Guilt) and the capital gain is taxed on strips unlike Guilts.
Starmer thinks you're 'guilt'y for having savings and can get stripped of anything you own. Tax treatment of gilts?
Indeed, Google “DMO Tax strips” . All the gains on strips are taxed as income, negating the benefit stated. To avoid this use low coupon gilts like T26, the increase in value of those isn’t taxed at all, you just pay tax on the small coupon element.
Great video. Spot on. Thank you. On many people’s minds at the moment. One question: how do we set about buying gilts? I have an AJBell account. Can they help?
AJ Bell do allow you to buy GILTS, under shares and markets then other investments.
Thank you!
I like the idea of buy gilts as I never thought about that before. How did you know the final price would be £100.
All gilts are redeemed at their par value. They are sold in blocks of £100 par value so that is what will be paid at maturity.
@@paulcassidy8130 thank you for confirming that
How. Do I contact you please. You sound like a good financial advisor
Hi Mike. There is a link to the website on the RUclips channel home page.
Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account. I'm now seeking best possible areas or ways to gain wealth in today's economy.
Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retirement.
Both have their perks but you can also save for retirement outside of a retirement plan, such as in an individual investment account or employing the services of a retirement planner/investment advisor.
Private investing is the best way to go about the market right now, especially for near retirees, I've been in touch with a wealth manager, netted 370K the last downturn, made it clear there's more to the markets than we average joes know.
Who is this Adviser or investor you use? I lost over 35000 already this year, I’m in need of a planner going forward.
My consultant is Jessica Lee Horst , experienced advanced lady and consults formanly brokerages hence is independent and can be a fiduciary to you.
Very informative. Keep it coming😅
More to come!
I have a decent amount in savings and £20,000 in an ISA , but only income is a small private pension of £606 every four weeks, how much interest can I make per year before paying tax? Thanks in advance.
A total of 6k
Question: If I made £1200 in one tax year from saving accounts and £900 of it was from ISA account but £300 from other saving accounts. How much Tax do I pay if at all?
Possibly nothing if you are a basic rate tax payer and qualify for the £1000 personal savings allowance.
@@carlrobertsifa Thank you for your answer. Another question: If I make £1200 profit in one tax year but all of it is from none ISA saving accounts do I pay 20% tax from the whole £1200 or 20% from only £200 that exceeded the allowance?
@@ellerellerek52
All ISA INTEREST IS TAX FREE
So, if you earn over £51000 or earn £48000 and get interest of £5000....if you put money into your pension, lets say £10000 gross, including the tax relief element, do you then still get the £1000 savings allowance rather than £500, and do you pay tax on the savings at 20% rather than 40%? Similarly, if you earn £50000 and £5000 interest, if you put £40000 into a pension, does that mean you pay no tax on the interest at all?🤨
Only if you put the money into your pension by salary sacrifice, then how your thinking works.
E.g your salary is £52,000 if salary sacrifice £10k then tax man sees it as a salary of £42K, ie your in the 20% tax bracket so interest earned on savings upto £1,000 is allowed.
Take your money out of the banks as its not really yours buy silver and gold and where does it say in law you have to pay tax in the first place tax office couldnt find anything
Or buy premium bonds and open multiple cash isas.
I struggle to believe that many / most individuals who have a tax liability on interest received actually declare it to HMRC. After all, how many individuals who SHOULD do a self assessment return actually do one, and with full disclosure.
Banks notify HMRC 😢
@@kevinrichards6506 - correct, and HMRC in most cases do nothing.
And what better time to own shares, the in a stock market bubble.
Hi all
Just to clarify matters given I've been sent my interest / tax for the 2023/2024 year.
I'm due to pay £52.80
I have two options
a) pay outright
b) in the 2025/2026 tax year it is taken off in 12 installments from my pay.
Hope this helps matters undertand how and when it goes out / paid
It’s no wonder the tax take on savings has gone up coz the interest rates have improved since last year. This means more savers are exceeding their allowance.
Very interesting, thankyou.
🎉useful absolutely
Don't 'save' in a bank. Buy Gold and Silver. Simple. Historic confirmation readily available.
Helpful advice,.thsnkd
Priceless 🙏