Carpetbaggers should stay with the Woolwich - at least for now
Sunday 07 April 1996
It was Mr Robinson who coined the term "carpetbaggers" - savers who open accounts in the hope of a windfall.
His exclusion of perhaps 40,000 savers from the Woolwich's free shares handout turned into a serious PR gaffe.
It was not just what he did, which theoretically meant more money for longer-term savers and borrowers, but his contemptuous je ne regrette rien stance which so enraged and contributed to threats of legal action.
But Mr Robinson's departure could well be a prompt for the excluded carpetbaggers to be let back into the windfall fold.
After last week's fiasco, the Woolwich is that much more vulnerable to being taken over. A predator might include carpetbaggers in any new offer in an attempt to win support.
Alternatively, Mr Robinson's successor might well see advantage in playing the same card - it could help re-establish the society's credibility.
Either way, carpetbaggers who are still with the Woolwich should keep their accounts open and wait. They are unlikely to suffer another carpeting.
PEOPLE may be more likely to acknowledge Easter than that other diary entry this weekend - the new tax year.
There is, however, some cause for financial celebration. All tax payers will be better off, according to Coopers & Lybrand, as a result of income tax changes including a cut in the basic rate to 24 per cent, and the point where higher rate kicks in rising to pounds 25,500 over and above allowances(pounds 29,265 for single people).
But another seemingly attractive tax change - a cut in savings tax to 20 per cent - may well prove not to be worth much in practice. Primarily the tax cut affects the interest earned on taxable building society and bank accounts.
Theoretically some 20 million savers stand to benefit. Basic-rate taxpayers will receive pounds 5 more from every pounds 100 of gross interest they earn. People who are currently in the 20 per cent tax band could also benefit. Previously they had 25 per cent tax deducted at source from their savings. They could reclaim the 5 per cent difference, but in practice often didn't.
By comparison higher-rate tax payers were always going to miss out. While they too will see tax on their savings fall from 25 per cent to 20 per cent, they will now be required to pay an additional 20 per cent through their tax return, rather than 15 per cent as before. But even basic and 20 per cent taxpayers will be hard pushed to notice the cut.
Interest rates on savings accounts are already at historic lows - on pounds 1,000 you will be lucky to get 3 per cent gross on instant access. On 3 per cent gross, the cut in savings tax means the net interest rate rising from 2.25 to 2.4 per cent - pounds 1.50 more a year. For most savers the change will be worth less than a tenner. But add in the fact that building societies and banks continue to pare away at rates, with cuts of 0.25 per cent widespread. The tax cut then starts to look more like a break for societies and banks, allowing them to further reduce their rates, than for savers
FINALLY, the new system of tax self-assessment gets under way from this weekend. This affects anyone who fills in a tax return - particularly the self-employed. Despite the horror stories, however, the only immediate thing for people to do is ensure they are keeping pay slips and proper records of other income and expenses. Next week we'll look at the new system in detail.
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