Many customers will have money on deposit either with a bank or building society

Commercial banks

Commercial banks offer a wide variety of accounts. Interest, which varies inline with the general level of interest rates, is paid net of 20% tax. Non-taxpayers are able to reclaim the tax deducted or arrange to have the interest paid gross. Starter rate taxpayers can claim back all of the 20% deducted at source, basic rate taxpayers have no further liability and higher rate taxpayers will be liable to a further 20% on the gross interest.

Building Societies

Building societies also offer a variety of savings accounts each with different terms and conditions. Interest earned may be fixed for a specified period or vary in line with interest rates generally. Interest will be paid net of 20% tax. The tax position is the same as commercial bank deposit accounts. Some accounts may restrict access to the money in the account and there may be penalties for early withdrawals.

Tessas

Between January 1991 and April 1999, banks and building societies offer Tax Exempt Special Savings Accounts (TESSAs). Individuals aged 18 or over and UK residents were eligible to have one. The purpose was for savers to deposit up to a maximum of £9,000 over a five year period. Provided they did not withdraw any of their original investment or more than the net interest, the TESSA would qualify as a tax free investment on the 5 th anniversary. As from 6 April 1999, TESSAs were replaced by Individual Savings Accounts (ISAs)

Cash only mini ISA

ISAs were introduced in April 1999 and consist of two types, mini and maxi ISAs. Each tax year an investor can invest up to a maximum of £7,000 per tax year (£3,000 if cash only) in a maxi ISA. Mini ISAs can consist of money on deposit enjoying a tax free environment. The maximum investment into a cash only mini ISA is £3,000. The minimum age to own a cash only mini ISA is 16 attained.

National Savings

National Savings are Government backed and there are a variety of instruments available.

Index Linked Certificates
Fixed Interest Savings Certificates
Children’s Bonus Bonds
Fixed Rate Savings Bond
Income Bonds
Capital Bonds
Ordinary account
Investment account
Pensioner’s Guaranteed Income Bond


Your Retirement Strategies No. 1 Albany Terrace Worcester Worcestershire UK WR1 3DU
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Managing Director Martin Cooper



Your Retirement Strategies is a trading style of Martin Cooper Wealth Management Limited which is Authorised and Regulated by the Financial Services Authority. Martin Cooper Wealth Management Limited is entered on the FSA register (www.fsa.gov.uk/register/) under reference 434737
The guidance and / or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. The Financial Services Authority does not regulate Inheritance Tax Planning and Estate Planning.