Maximising cash reserves
Having cash savings provides peace of mind and financial stability; it is also critical to ensure these savings are earning decent interest, are tax-efficient and protected by the Financial Services Compensation Scheme.
Efficient cash management.
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The UK’s Financial Services Compensation Scheme (FSCS) is a government-backed safety net that provides protection to consumers in the event of a financial institution's failure. It protects cash deposits up to a maximum of £85,000 per person, per banking group - for joint account holders the allowance is £170,000. Any balances held in excess of this are not protected in the event of a failure. It’s important to note that banking groups may have multiple brands within their structure - the allowance is per group, not per trading name or brand.
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Now interest rates are higher, ensuring your cash is earning the best rate can make a large difference to your wealth. It also involves searching across the market as well as taking advantage of instant access, notice and fixed term accounts.
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Basic and Higher Rate taxpayers are able to earn interest of up to £1,000 and £500 respectively before paying tax, via the Personal Savings Allowance. However, any interest earned in excess of this amount will be subject to tax at your marginal income tax rate. Spreading interest payments across tax years can assisting in utilising these allowances to their maximum.
The benefits of a cash management platform.
Avoid the hassle of opening, closing or maintaining multiple accounts.
Multiple banks and deposit takers to spread FSCS protection, including those not available on the high street.
The ability to hold large deposits in one place, and create different levels of access for different objective.
Assists in tax planning, by showing the exact interest payment to spread between tax years to utilise the personal savings allowance.
