A quick guide to saving
How to decide what’s right for you
Savings and investments can be a good way to provide for your financial future.
We have a choice of solutions designed to help make savings and investing simple. We’ve prepared this brief introduction to help you decide which are right for you.
Savings or investments?
With our savings accounts, any growth will be related to the interest rate you earn on your account.
Investing makes your money work harder and the potential rewards are higher. But there is a risk that you may lose some or even all of your money.
Instant–access accounts mean you can get at your savings whenever you want to, while fixed–term accounts may require you to lock your money away for a period of time. Depending on the type of accounts, some may offer tiered rates of interest – so the more you save, the more you'll earn.
If you want to save a regular amount each month, there are also accounts to help you with this.
Tax on savings
From 6 April 2016, you’ll receive your savings interest without tax deducted.
If you’re a UK taxpayer, you will have a tax-free Personal Savings Allowance (PSA) of £1,000 (or £500 for higher rate taxpayers and £0 for additional-rate taxpayers) on the interest that you earn on your savings.
Any interest you earn above your PSA will be subject to tax. It will be your responsibility to ensure that any tax due on interest payments received is paid to HM Revenue & Customs (HMRC).
Please note your PSA applies to the total interest you earn from all banks/building societies, not just interest from us, with the exception of ISAs, which continue to be free from UK tax for eligible customers.
Please also note that tax liability on interest applies in the tax year it is paid, which may be different to the tax year(s) in which interest has accrued.
Thinking of investing? You could try Smart Investor, our new online direct-investing service. It makes investing easy and puts you in control.
Remember, the value of investments can fall as well as rise and you may get back less than you invest. Smart Investor doesn’t offer advice. If you’re not sure about investing, seek independent advice. Tax rules may change in the future and any benefits to you depend on your individual circumstances.
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