Bypassblade Posted January 4, 2013 Share Posted January 4, 2013 You're not taxed on the capital you put into the bank but on the earnings you get from the interest...it's income so is taxed like other income.. Oh I understand the concept Truman, just don't like it Link to comment Share on other sites More sharing options...
Guest sibon Posted January 4, 2013 Share Posted January 4, 2013 Neither is it a good time to put your money into an ISA!..........most are pathetic performers with high charges unless you do it your self. ISAs have had their day,they were good at one time.............but if you are silly enough to hand money over to the city boys in the stock exchange and think they will be good enough to give you much more than a pittance back..............then you are deluding yourself. Mine has been running since 2002. The annualised percentage rate of return is in double figures. The only time period where it has fallen below 7% is 2010-2012. The good years more than made up for this. I did do plenty of my own research before investing though. I feel dirty, being more capitalist than you:D Link to comment Share on other sites More sharing options...
truman Posted January 7, 2013 Share Posted January 7, 2013 But don't you dare get ill and have to be put into a nursing hom. Watch your savings diminish then. What does that have to with interest being taxed? Link to comment Share on other sites More sharing options...
epiphany Posted January 8, 2013 Share Posted January 8, 2013 You hand over your money so that banks can loan it to businesses etc A common misconception. It's a bit more "sleight of hand" than that. http://www.positivemoney.org/how-banks-create-money/proof-that-banks-create-money/ Link to comment Share on other sites More sharing options...
Anna B Posted January 8, 2013 Share Posted January 8, 2013 Definitely do it yourself, choose your own funds to invest in. The best are passively managed tracker funds since the annual charges are so small. Over the last year a FTSE 250 tracker would have risen 24%. Try getting that rate of return on your savings elsewhere. Don't kid yourself that you will automatically get a return of 24% on a tracker. It all depends which tracker you choose - and there are thousands out there... Believe it or not, some trackers actually managed to lose money. ---------- Post added 08-01-2013 at 04:57 ---------- If I were rich enough to not have to work but, instead, all my income came from my savings account then are you saying I shouldn't be taxed on it? But back in the real world most of us do work, and our income is already heavily taxed. Then if we manage to save a little out of it it's taxed again... Link to comment Share on other sites More sharing options...
harvey19 Posted January 8, 2013 Share Posted January 8, 2013 Tax is paid on savings interest. If a elderly person goes into care their savings are used to pay fpr that care. If a person saves nothing and spends everything they do not pay tax on savings inerest(therfore less money paid to the government than a saver) and get care for free. It makes you wonder whether it is worth adhering to the old adage of saving for your old age. Link to comment Share on other sites More sharing options...
truman Posted January 8, 2013 Share Posted January 8, 2013 Don't kid yourself that you will automatically get a return of 24% on a tracker. It all depends which tracker you choose - and there are thousands out there... Believe it or not, some trackers actually managed to lose money. ---------- Post added 08-01-2013 at 04:57 ---------- But back in the real world most of us do work, and our income is already heavily taxed. Then if we manage to save a little out of it it's taxed again... No,your savings aren't taxed at all...it's the income from them that is..could you answer the question I asked..would it be fair for me to pay no tax if all my income came from the interest on my savings..? Link to comment Share on other sites More sharing options...
Jeffrey Shaw Posted January 8, 2013 Share Posted January 8, 2013 No, it wouldn't. "Unearned" income is taxed just as "earned" income is. Link to comment Share on other sites More sharing options...
Uptowngirl Posted January 8, 2013 Author Share Posted January 8, 2013 .could you answer the question I asked..would it be fair for me to pay no tax if all my income came from the interest on my savings..? Yes it would. If at the end of a year you end up with less in real terms than you started with it does seem a bit perverse to be taxed on that inflationary element. If you had your life savings on deposit and earned 2% interest whilst inflation was 4% you are loosing money not gaining it. For many people this is the money that they have to survive on for the rest of their life. (as in your question) To my idea a fair system would be to index savings. So you pay tax on income above inflation, provided that income is over the tax threshold. Link to comment Share on other sites More sharing options...
truman Posted January 8, 2013 Share Posted January 8, 2013 Yes it would. If at the end of a year you end up with less in real terms than you started with it does seem a bit perverse to be taxed on that inflationary element. If you had your life savings on deposit and earned 2% interest whilst inflation was 4% you are loosing money not gaining it. For many people this is the money that they have to survive on for the rest of their life. (as in your question) To my idea a fair system would be to index savings. So you pay tax on income above inflation, provided that income is over the tax threshold. So if I got a lower than inflation pay rise I shouldn't be taxed on it? Link to comment Share on other sites More sharing options...
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