In recent weeks there appeared to be a glimmer of hope appearing that I might be able to get a little more interest on my cash and cash-like (NS&I Index Linked Savings Certificates) holdings. This was of interest to me as I currently have in excess of £300,000 in these products in readiness for a home purchase and to help me live off dividends only in my soon to be early retirement.It started with Goldman Sachs entering the UK savings account market with their Marcus account paying an annualised 1.5%. Nothing to get excited about given, that after I pay my additional rate tax of 45%, that reduces to 0.83% meaning in inflation adjusted terms I’m still going backwards at a rate of knots with the RPI currently sitting at 3.3%. Even for those with a basic rate tax of 20% this account still sees you going backwards in real terms, both before or after you've used your £1,000 basic rate tax free personal savings allowance, as you’ll only end up with 1.5% (within the tax free personal savings allowance) or 1.2% (post the tax free savings allowance) in your pocket. Still better than a poke in the eye with a pointy stick as it puts an extra £222 into my pocket annually when compared to the savings product I ditched.
Then Charter Savings Bank popped in with a slightly lower annualised 1.4%. Again, nothing to write home about, but better than what I did have meaning an extra £153 in my pocket annually.