Virgin Savings Guide
Deciding where to slot away your cash can be tricky, with a wide range of savings products to pick from. You could choose an easy access savings account, with unlimited withdrawals if you think you might need short-term access to your cash. However, check the terms and conditions as many of these accounts come with a bonus for a certain period, meaning you’d stop getting the attractive rate of interest at some point. You’d then need to think about switching to a better deal.
Another option is a fixed-rate savings account, although make sure you’re happy to tie up your savings for a specific period with one of these. Rates are typically fixed for one, two, three or more years.
Thanks to the Personal Savings Allowance, savings interest is now paid without any deduction of tax. If you are a standard rate (20%) taxpayer, you can earn up to £1,000 in savings interest tax-free each year. Higher rate (40%) taxpayers can earn up to £500 a year in savings interest without paying tax.
Those on the additional rate (45%) do not benefit from a Personal Savings Allowance and must pay tax on savings interest.
In addition to this tax-free allowance, you can save tax-free in an individual savings account, where every adult has an annual allowance tied to the tax year, which ends each year on April 5 (in 2016/17, the ISA allowance is £15,240).
But whatever account you pick, make sure it suits your needs, and that you understand the terms and conditions attached.
The first £85,000 (as of 30 January, 2017) of any savings held with an instituion such as Virgin is protected by the Financial Services Compensation Scheme (FSCS).