Don't be lazy
Sunday 02 June 1996
Even in straitened timesthat's not good - 5 per cent plus should be attainable on that amount without having to resort to anything more restrictive than a decent postal account. Putting my cash into a new Tessa would pay even more.
Many thousands of savers with matured Tessas are similarly losing out because they're not getting their act together. In some cases the interest they're throwing away could approach pounds 50 each month.
When Tessas mature, the money isn't paid out automatically. The bank or building society that signed you up for your first Tessa will almost certainly try and get you to "roll over" into a new Tessa. But if you don't respond to this or other offers you'll find your money shunted into an account that's neither tax-free nor rewarding. At worst, you could be shifted from a double-figure interest rate to 2 per cent or less.
And don't rely on talk of better rates from die-hard societies that aren't handing out windfalls. Matured Tessa money with the Yorkshire earns just 2.35 per cent before tax, with the Nationwide between 2.8 and 4.2 per cent. By comparison, the Halifax, a bank-to-be which the die- hards would have us believe will increasingly milk its savers, pays a relatively generous 5.65 per cent.
My excuse for not reinvesting yet in a new Tessa is that I'm holding out for a fixed-rate deal of closer to 8 per cent. The highest now available is 7.5 per cent from Sun Banking Corporation (Best Savings Rates, page 14), but I reckon such rates will go higher sometime over the next few months. By comparison, with variable-rate Tessas, there's no reason to wait - rates are likely to get worse before they get better.
And if you don't want a Tessa with the same institution but feel tied in by the promise of a windfall, it may still be possible to improve on the given deal without hurting your handout. The Woolwich, for example, will allow matured Tessa money to be switched into a tax-free Woolwich PEP without reducing windfall eligibility, so long as you keep back pounds 100 in the savings account.
- 1 What happens to your body when you give up sugar?
- 2 Have sex with your iPad thanks to the new sex toy no-one asked for
- 3 The 'sex selfie stick' lets you FaceTime the inside of a vagina
- 4 Why you're almost certainly more like your father than your mother
- 5 Westboro Baptist Church couldn't picket Leonard Nimoy's funeral because they didn't know where it was
Mark Zuckerberg: Facebook CEO's one simple test for who to hire
Bali nine: Welcome to 'Execution Island' – the Indonesian holiday resort where foreigners are sent to die
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Saudi Arabia executions now at 'unprecedented rate' after kingdom kills four more in two days
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Nigel Farage promises Ukip will not 'stigmatise' would-be migrants – and says he wants 'everyone to speak the same language'
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
iJobs Money & Business
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...