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June 13, 2021   |   Articles

What is a good credit score?

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When is your credit rating good or bad? And what does it mean?

I’ve got four different credit scores. 999, 906, 636 and 505. Is one better than the other? You’d assume that since 999 is highest, that’s my best one. And the lowest at 505 needs some work.

But all are actually classed as “excellent”. And the 906 and 505 are from the exact same data – but with different ranges.

So it’s clear that it’s not a simple case of saying the higher the number is better!

In this article I’ll help you get an idea of how good your score actually is, and how the different classifications of bands could impact your changes of borrowing money and applying for credit.

Some articles on the site contain affiliate links, which provide a small commission to help fund our work. However, they won’t affect the price you pay or our editorial independence. Read more here.

The problems with credit score ranges

The main issue with credit scores is there isn’t just one. In fact there are three different companies providing scores, and they don’t all use the same data about your finances.

Another problem with credit scores is they’re calculated in completely different ways. You can’t really use a number to say if it’s good or bad without the wider context such as the range that number is taken from. Some are out of around 999, others out closer to 700.

And, to complicate it even more, the companies you apply to don’t actually use these scores! They access the data behind the scores from the credit reference agencies alongside any information you provide. They also look for different things depending what you’re applying for.

So clearly it’s not always so obvious what a good score is and know whether you’re going to be accepted for whatever credit youre applying for.

What credit scores are excellent, good, fair and poor?

Here’s how the three different credit reference agencies class each score, as well as their own ranges.

Experian

Experian is the biggest of the agencies. They score out of 999.

Experian credit score ranges

  • Excellent 961-999
  • Good 881-960
  • Fair 721-880
  • Poor 561-720
  • Very poor 0-560

Equifax

Equifax recently changed the range from 1-700 to 1-1,000.

Equifax credit score ranges

  • Excellent 811+
  • Very Good 671-810
  • Good 531-670
  • Fair 439-530
  • Poor 0-438

However, if you are checking your score for free through Clear Credit you’ll still see the old range. Clearscore told the DebtCamel website.

“We have plans to move to a score out of 1000 later in the year. It has always been our mission to make the world of credit clearer, calmer and easier to understand, and this move will hopefully make things a lot clearer for the consumer.”

If you’re seeing the score out of 700 the range is as follows:

Equifax credit score ranges on ClearScore

  • Excellent 467+
  • Good 420-466
  • Fair 367-419
  • Poor 279-366
  • Very poor 0-278

Transunion

TransUnion, which you can access for free through Credit Karma, scores out of 710.

Transunion credit score ranges

  • Excellent 628+
  • Good 604-627
  • Fair 566-603
  • Needs work 1-565

What’s an average credit score in the UK?

Not all the credit reference agencies share this, but ClearScore, using the old Equifax system says at the time of writing that the UK average credit score is 414. This puts it in the “Fair” band, though right at the top.

Experian offers a map where you can break down scores by regions (and age too if you want). For London the average credit score is 887, which ranks as the bottom end of Good. For North Somerset, it’s 823, halfway through Fair.

How important is a credit score?

The most important thing to say here is credit scores don’t actually mean anything definitively. They’re an indicator of how good or bad your credit report is (I’ve explained more in this article about credit reports).

But this isn’t the only information lenders take into account. Extra details you provide, such as your salary, could help or hinder your chances of acceptance. In fact, they won’t even see this score, and will create their own version of it based on their own criteria, the info on your credit report and the extra details they have.

Really the number itself is pretty meaningless, except to measure your progress when trying to improve it. If you see it go up you know you’re doing the right things.

If you see it dip then it could be a sign you need to take some actions – though it’ll always fall a little after a new application and will right itself after a while.

What do the different credit score ranges mean?

Really it’s probably better to look at the category your credit score sites in. Broadly scoring in the different ranges from excellent down to very poor is likely to mean the following:

What an excellent credit score means

Across the agencies “excellent” suggests you’ll probably get accepted for most types of credit and be offered the best rates and deals. But there’s no guarantee and you could still get rejected when you apply.

What a good credit score means

A “good” credit score indicates you will usually be accepted for credit, though you might not get the best deals.

What a fair credit score means

An “average” or “fair” score means there is still a decent chance you’ll get accepted but you won’t get the best deals or rates. For example, you might get a lower credit limit or a shorter 0% period. It’s even more important to use soft checks, particularly on credit card applications, to find out who will accept you.

What a poor credit score means

If your score is classed as “poor” or “needs work” – and it’s likely you’ll be seen as high risk to lend to therefore far less likely to be accepted when applying for credit.

What a very poor credit score means

Right at the bottom, being classed as “very poor” is a sign you will probably get rejected. This could be because you have some black marks on your credit report – such as bankruptcy – or maybe just a very limited credit history.

Andy’s Top Takeway

Credit scores can be a bit of a minefield. Especially considering the score you are looking at may not even be the same score prospective lenders are looking at. Rather than focusing on numerical value, find out where that falls on that agency’s scale and that will give a clearer idea of what your score means.

How to check your credit score

Good news! You don’t need to pay to check your score, or more importantly, your credit report. I’ve written more detail on the free credit report sites here.

Read next

May 11, 2021   |   Articles

Passive income from bank rewards

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Is it worth opening multiple current accounts to earn monthly rewards?

I’m a bit of a bank account geek, and have tried and tested most of the UK ones – often as part of nabbing a switching bonus of £100 or more.

But these cash incentives aren’t the only way to make money from your account. There are quite a few which will give you a smaller cash reward every month if you meet certain criteria.

Often that is a requirement to pay in a set amount each month. Sometimes there’s also the need to pay out some direct debits or spend a minimum amount. You might also need to log into your app on a regular basis.

It’s all simple enough. But is it worth the effort? Here’s my take on which ones to open and which ones to avoid. Plus how much you could make if you opened them all up.

The essential reward accounts

If you’re not sure how many current accounts, these are good ones to start with.

With these three accounts combined you’ll make around £160 a year, give or take a tenner since the Santander 123 Lite account cashback value will depend on the size of your household bills.

The Club Lloyds account doesn’t give cash but a choice of “lifestyle benefit” such as cinema tickets or a magazine subscription. I’ve given it a monthly value of £3.50, though it could be more.

Halifax RewardSantander 123 LiteClub Lloyds
Reward£5.00£7.00£3.50
Fee£0.00*£2.00£0.00*
Monthly profit£5.00£5.00£3.50
Annual profit£60.00£60.00£42.00
Requirements includePay in £1,500 a month Pay in £500 a monthPay in £1,500 a month
Spend £500 on debit cardTwo direct debits (though five or six to get full cashback)
Keep balance above £0Paperless
Log in once every three months
More detailsMy Halifax Rewards reviewMy Santander 123 Lite reviewMy Club Lloyds review
* if you pay in £1,500 a month

The next three reward accounts

If you want to take it further you can open up three more reward accounts, each earning you £3 a month after fees. So there’s potentially £108 extra a year from these accounts.

These are definitely worth adding to or upgrading existing accounts you have with the banks to get the cash. But the smaller returns mean you need to weigh up whether you are happy to do the admin required to apply and then manage the accounts.

Barclays Blue*Natwest RewardRBS Reward
Reward£7.00£5.00£5.00
Fee£4.00£2.00£2.00
Monthly profit£3.00£3.00£3.00
Annual profit£36.00£36.00£36.00
Requirements includePay in £800 a monthTwo direct debits of at least £2Two direct debits of at least £2
Two direct debitsLog into mobile appLog into mobile app
*changing in March 2022

The final three rewards

These final accounts are for completists only and personally I’ve not bothered with them. They require minimum usage of your debit cards – 30 for each of the TSB accounts and 60 for the Co-operative Bank account. I think that’s too much hassle.

But if you want to go through with these then you’ll get an extra £80 in the first year. The TSB accounts can earn you cashback via Quidco, worth an extra £30 to £60 (and sometimes more) on the first one you open.

TSB Spend & SaveTSB Spend & Save PlusCo-operative Bank Everyday Rewards
Reward£5.00£5.00£2.20
Fee£0.00£3.00£0.00
* limited to six months
Monthly profit£5.00£2.00£2.20
Annual profit£30.00£24.00£26.40
Requirements include30 debit card transactions30 debit card transactions60 debit card transactions
Four direct debits
Pay in £800 a month
Keep balance above £0

Getting more as joint accounts

If you have someone you can open a joint account with then you can get the rewards again with a handful of the accounts.

It’s probably worth doing this for the Halifax and Club Lloyds accounts, earning an extra £102 a year. I think adding another TSB Spend & Save Plus account makes very little sense as that’s another 30 debit card transactions you’ll need.

Halifax RewardClub LloydsTSB Spend & Save Plus
Reward£5.00£3.50£5.00
Fee£0.00£0.00£3.00
Monthly profit£5.00£3.50£2.00
Annual profit£60.00£42.00£24.00
Requirements includePay in £1,500 a monthPay in £1,500 a month30 debit card transactions
Spend £500 on debit card
Keep balance above £0

Even more accounts for your partner

And if you’re opening accounts with someone else, they can obviously also open up their own accounts. It’s not quite the same list as for you as there’s no point having a second Santander 123 Lite account (you can’t earn cashback twice on your bills), which brings the most they’ll earn for opening a Halifax Reward, Barclays Blue, Natwest Reward, RBS Reward and Club Lloyds down to £210.

How much you can make?

Obviously it depends on how many accounts you open, and whether you’re also able to open up those extra joint accounts.

But sticking with those first six account will get you £270 a year. Add in a second (joint) Halifax Reward and Club Lloyds boosts that to £372.

And if the person you have the joint account with opens those same ones except for Santander 123 Lite, you’re looking at another £210 and a total of £582 a year.

If you wanted to go extreme and add in the TSB Spend & Save, TSB Spend & Save Plus and Co-operative Bank Everyday Rewards you could add on another £80 for your own accounts, and another £50 for joint accounts.

Andy’s analysis

These rewards are great ways to earn extra cash every year, and in the most part pretty easy to manage. But they’re only worth opening if you feel the return is enough.

That could mean you just stick with the first three accounts and only look at others if there’s an extra reason to open one, such as a bank switch offer.

Still, even I draw the line at the TSB and Co-operative Bank accounts. if you already have them and use them as your main account you might find it easy to meet the debit card transaction requirements. But I’d argue you’re better off switching that account to a different bank for a reward that takes less effort!

Meeting the reward requirements

I’ve said it’s easy to have more than one of these accounts, but you do have to make sure you meet the different requirements.

As I’ve written about elsewhere, this can be quite simple – even automated. Do read my full guide which also shares tips to help you find extra Direct Debits.

Make even more money from your bank

If you open up any of these accounts, make sure you also take advantage of other benefits. The Natwest and RBS accounts, for example, make you eligible for a 3.04% paying regular saver – and you can have one with each account.

And don’t forget the biggest earners – bank switching. You might want to wait for Halifax to offer a cash bonus for opening an account. In the past Natwest and Lloyds have let existing customers switch in for a bonus, so you might not have to wait to open those (though I can’t guarante it).

The best bank reward & switch bonuses

Check out my list of all the offers you can get when opening a new current account

best bank switching offers

April 13, 2021   |   Articles

Get “work perks” and a cash bonus with a new ISA

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This cash hack will help you save regularly at big brands including John Lewis, Tesco and Odeon.

Some of you will get access to all sorts of deals and discounts via your employer (if you’re not sure – ask your HR department!) or membership of something like health insurance. These work perk benefits can be pretty good, often giving money off gift cards and cheap cinema tickets.

I’ve had access to different ones in the past from working at the BBC, having BUPA health insurance, and a Scottish Friendly ISA. But what if you won’t work for a company with a scheme, or can’t afford things like BUPA?

Work perk discounts on brands such as John Lewis and ITunes

How anyone can get access to a “work perks” scheme

I’ve found a way that’ll get you access to one of these schemes – and there’s no need to change your job, or sign up to insurance with a high monthly fee in order to get these discounts.

Instead the trick shouldn’t cost you anything. In fact it’s possible that you could make around £150 on top (more on this in a bit).

These deals are available via an investment company called Scottish Friendly, and to get them you are required to open an ISA and invest money.

There’s obviously a risk with Investment ISAs that you could lose a little bit of money – investments go up and go down. Plus you can only open and pay into one of these accounts each year. More on this further down the page.

First though, a little about the types of discount you’ll get so you can decide if it’s worth it.

What you get with from Scottish Friendly’s perk scheme

Discounted gift cards 

The gift cards you get can be physical or digital. Some are reloadable, so once you’ve got the first one it’s easy to add more money one. Though gift cards have risks, use them right and you can stack them with other offers as they’re treated as if they were cash. At the moment the offers include:

  • 5.5% off John Lewis or Waitrose
  • 4% off Asda
  • 4% off Morrisons
  • 5% off Sainsbury’s
  • 4% off Tesco
  • 6.5% off M&S
  • 4% off Uber
  • 3% off Ikea
  • 6.5% off Argos
  • 7.5% off Asos
  • 5.5% off Primark
  • 4% off Wickes
  • 9.5% off H&M
  • 13.5% off Sky Store
  • 7.5% off Curry’s
  • 4.5% off B&Q
  • 8.5% off Body Shop
  • 6.5% off Ticketmaster
  • 6% off Pizza Express
  • 9.5% off One 4 All cards (which you can spend at places such as John Lewis)
  • 9.5% off Pizza Hut
  • 9.5% off All Bar One and other Mitchel and Butler pubs

All correct at the time of writing.

Cheap cinema tickets

Membership also gives you discounted cinema tickets. Obviously cinemas haven’t reopened yet, so these deals aren’t running, but are worth considering when they do.

You can get 2D tickets from all the big chains. Whether it’s cheaper than other similar schemes, such as Tastecard or Kids Pass does depend on the chain and location you pick. And you might be able to save money via these other deals. Even so, it’s a good option to have on hand.

Some chains also allow you to upgrade to 3D or premium seats, or save on your snacks in advance. You can also save on annual memberships. These are actually pretty good savings. A year of Cineworld Unlimited (outside Central London) is 23% less than full price, and a year of Odeon Limitless (also outside London) is 27% less.

Chains include

  • Empire
  • The Light
  • Merlin
  • Odeon
  • Showcase
  • Vue

Other entertainment discounts

Though paused due to the pandemic, there are also discounts for theme parks such as Alton Towers and Thorpe Park, experiences such as the London Eye and Go Ape, and memberships to things like National Trust.

Money off in restaurants

You’ll get a card you can flash at various restaurants for money off, including the following:

  • 3.5% off Uber Eats or Deliveroo
  • 9.5% off at Costa
  • 10% off at Tortilla
  • 20% off at Carluccio’s
  • 20% off at Frankie & Bennies
  • 25% off at Prezzo

All correct at the time of writing.

How to get these discounts

Open up an ISA

You’ll need to open up an Investment ISA with Scottish Friendly to get the rewards.

Deposits start from £10 a month. You can stop these at any time, and keep the ISA open even with no money left it in – which should mean you keep access to your perks and discounts.

There are fees attached, so your money could be worth less when you take it out than when you put it in. But they could also have grown.

It’s really important to point out that you can’t pay into more than one investment ISA in a financial year. So if you’ve already done this in 2021/2021, you’ll need to wait until April 6th 2022.

And either way, by following this trick it does prevent you from paying into another investment ISA in the 21/220 financial year. You’ll be able to pay into a different type of ISA, such as a Cash ISA, or Lifetime ISA.

So you need to be sure that you wouldn’t rather shop around for a different investment ISA.

Get your welcome bonus

With the My Easy Choice ISA you can also get a gift card reward when you go direct, starting at £15 up to £45, depending on how much you deposit. It’s an easy win.

  • If you deposit £10 to £14.99 a month you’ll get a £15 voucher
  • If you deposit £15 to £19.99 a month you’ll get a £20 voucher
  • If you deposit £20 to £24.99 a month you’ll get a £25 voucher
  • If you deposit £25 to £29.99 a month you’ll get a £30 voucher
  • If you deposit £30 to £34.99 a month you’ll get a £35 voucher
  • If you deposit £35 to £39.99 a month you’ll get a £40 voucher
  • If you deposit more than £40 a month you’ll get a £45 voucher

And until 13th April 2021 there’s an extra £10 added to all gift cards.

You get the reward voucher within 28 days of your first payment, and you can use the voucher at shops including John Lewis.

Buy vouchers via your Friendly Rewards account

Once you’ve done this, you’ll be sent details to access your Friendly Rewards account, and you can start taking advantage of the discounted gift cards.

How to get up to £150 extra cashback on your ISA

If you want to walk away with a potentially larger profit thanks to cashback, then you need to follow these steps. It’s all pretty easy, but I do have a few major warnings, which I’ll get to in a bit.

Go to a cashback site

Go to a cashback site – ideally TopCashback or Quidco. Then search for Scottish Friendly. You might see a few options. To get the most money you probably want the Investment ISA option rather than the Junior ISA.

Andy’s Top Tip

If you’ve never used Quidco or Topcashback then check out my page with the latest welcome bonuses for new users. They can be worth up to £17 on top of other cashback you earn.

You won’t get the bonus for getting the ISA with Scottish Friendly so you’ll need to also shop elsewhere, but there are thousands of brands to choose from, including M&S, ASOS and Booking.com.

Choose an ISA

*Rates correct at the time of writing *

Choose one of the Scottish Friendly cashback offers. At the time of writing, you can get £200 from Quidco and £150 from TopCashback.

*THE REALLY IMPORTANT BIT 1 – Investment ISAs*

As I said earlier when you open an investment ISA, your money is at risk. Hopefully the money you put in will go up in value, but it could fall.

And there will be fees which will reduce this initial investment. Even if you’re planning on opening an investment ISA, Scottish Friendly won’t necessarily have the lowest fees, so it’s worth comparing your options. I’m only suggesting Scottish Friendly for an ISA because of the work perks trick, not as an ISA.

And do read all the terms and conditions of your ISA so you know what you’re committing to. 

*THE REALLY IMPORTANT BIT 2 – Getting your cashback*

To qualify for the cashback there are two key requirements. One is to invest the money for at least 60 days.

Plus, the cashback will only be paid once you’ve made payments into your ISA at least equal to the value of the cashback. So if that’s the £200 cashback, you need to invest at least £200.

But there’s another clause which will probably reduce the cashback you get. The only Scottish Friendly ISA available via the cashback sites is a My Moneybuilder Select ISA – not the ones mentioned above.

These have a £50 exit fee if you cancel and cash out the ISA earlier than five years. So you either need to be prepared to leave your investment in the ISA for that time, or lose some of your cashback.

And don’t forget cashback can take a while to pay out – so you might not get the extra money for months.

Don’t forget you can still go direct and get the bonus gift card without having to lock in your money.

As ever with cashback sites, make sure you follow the instructions to ensure your click tracks.

Example

So if you can invest £100 a month for two months, you’ll be eligible for £200 in cashback from Quidco.

If you then withdraw the £200 investment and pay the £50 early withdrawal fee, you will get around £150 back, give or take any loses or gains made on the initial investment and fees charged.

Don’t close the ISA down though as you want to keep access to the discounts and benefits described above.

After some time the cashback payment of £200 will be processed and available to claim from your Quidco account.

If you can afford it, you might want to keep the £200 in the ISA until at least five years have passed to avoid the early exit fee.

Read next

Do you know any other hacks that will get you access to work perk schemes without expensive membership fees? Let me know in the comments below.

April 7, 2021   |   Articles

How to claim working from home tax relief

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With 47% of employees having worked from home in 2020, there’s a good chance you’re able to claim between £62 and £140 in tax relief.

If you’ve been required to work at home at all in the last year then you are eligible to get back some of the tax you’ve paid. You can do this for the whole 12 months even if there was only one day where this happened!

It’s also really easy to do thanks to a microsite set up by HMRC to process it for the 2020/21 tax year.

Update – And you can also now claim in the same way for 2021/22!

Most people are looking at receiving £62.40, though those who pay a higher rate of tax will be doubling that. A handful will be able to get £140.

Keep reading for everything you need to know about who can claim and how to do it, or watch this video with a step-by-step guide to applying.

What is working from home tax relief?

The logic behind this is you will have incurred extra household expenses while at home – from heating to insurance.

Who can claim?

Normally you can only claim for the weeks you’ve actually had to work from home. But that’s different for this last year.

You only need to have been required to work from home for one day since March 23rd 2020 (when lockdown began) to get the rebate for the entire 2020/21 year, and again for the 2021/22 year.

However, if your employer has already covered extra expenses you aren’t eligible. Also, you shouldn’t claim if you have chosen to work at home.

How much can you claim?

The tax relief is dependent on a few things – largely what you are claiming for and the rate of tax you pay on your income.

You can work out exactly how much extra you’ve spent on permitted expenses to claim the exact amount of tax back, but you do need to have receipts or proof of the extra costs.

What’s probably easiest for most people is to go with the set allowance. For the financial years 2020-21 (April 6th 2020 to April 5th 2021) and 2021/22 , it’s set at £6 a week. For previous tax years the rate is £4.

It doesn’t mean you’ll get £6 back for every week. Instead you’ll get the tax back on that £6, which works out as follows:

  • Basic rate taxpayers (charged 20% tax on most of your income) will get 20% of £6 back – a total of £1.20 a week. That’s 62.40 a year.
  • Higher rate taxpayers (40%) will get double that at £2.40 a week. That’s £124.80 a year
  • Additional rate taxpayers (45%) will get a little more at £2.70 a week, and £140.40 a year.

How will you get the money?

You won’t receive the money as a lump sum to your account or as a cheque. Instead, your tax code will be altered to accommodate this extra allowance. So essentially claiming really this means you’ll pay less tax each month.

How to make a claim

To make things easier there’s a government “microservice” most people can use. This uses the set £6 weekly allowance.

However this shortcut is only for those who don’t already fill in a self-assessment form. Those people will have to wait until they fill that in for that full tax year once it ends.

You can also claim for previous years but only for the days you were at home, and not via the microsite.

You’ll be asked:

  • Are you only claiming tax relief on your expenses for working from home? (Answer “Yes”)
  • Do you complete Self Assessment returns? (Answer “No”)
  • Has your employer paid your expenses for working from home? (Answer “No”)
  • Did you start working from home because of coronavirus (COVID-19)? (Answer “Yes”)

To make the claim you need a government gateway ID and password. This should take 10 minutes online. You’ll need your National Insurance number and either a payslip/P60 or your passport.

Once you have this you simply log in and follow the instructions. Don’t forget to claim from 23rd March 2020 if you were working from home then too.

What about 2021/22?

Money Saving Expert reported on 6th April 2021 that the microsite will carry on working for the new financial year, and you’ll be able to claim once more for the full year even if you only worked from home once.

If you didn’t claim for 2020/21 then you can still do this on the site.

April 4, 2021   |   Articles

How I manage my multiple bank accounts

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Here’s how to manage direct debits and cycle money to get current account perks.

It’s a good idea to have more than one current account, but with each extra account comes more admin. The good news is that most of the task can be done in one go early on, and then looks after itself! Here’s how I do this for all my accounts.

Current account admin

From cashback to monthly rewards, there are all sorts of incentives and freebies you can get with multiple current accounts. And don’t forget bank switching bonuses.

But many account switches and perks require extras like direct debits or minimum deposits each month. They also have fees and other requirements. Get them wrong and you could miss out or even lose money.

All this can put some people off. But it’s actually a lot easier to manage than you’d imagine, and I think the reward is well worth the effort.

Regular readers will know I have 15 different current accounts at the moment so I’ve got to have processes in place to make sure I don’t accidentally go overdrawn on one or miss out on a perk on another.

Minimum transfers

Many accounts require me to pay money in every month. If I didn’t I could miss out on all those little bonuses or get charged a monthly fee.

The good news is the money doesn’t need to remain in the account, and in most cases doesn’t need to be in one go, so you can hack this by moving the same money through all the accounts. Still that’s potentially a lot of transfers to process, which can take time.

If you have more than two or three accounts, then automation is the key. Set up standing orders to move the money on the same day each month. You can do this easily in your online or app banking.

If you do have multiple accounts with the same provider, transferring between them often doesn’t qualify (eg Halifax to Halifax), so you’ll need to factor this in.

Remember, it’s not just minimum deposits you need to cover here. There are those account fees, and in some cases you’ll want to be adding money to regular savers each month, so they need to be factored in.

There are three methods here:

The endless cycle

One trick is to move the same cash from account to account so it cycles through each one and back to the start, then repeats itself the next month and so on.

For example, you’ve got £2,000 in account a, which you transfer to account b, then to account c, then account d and finally back to account a. Then it repeats the next month, and so on.

The back and forth

Another option is to set up a standing order out of one account into another, and then back the next day. And then move the money into another account and back.

So you’re move £2,000 from account a to account b, then back to account a. Then move £1,000 from account a to account c, then back to account a. And so on.

It makes sense to spread these out through the month so you’re still only moving the same amount of cash. to make sure there is cash in the account to leave it in the first place.

The bitesize transfer

If you don’t have a large amount in your account to keep moving around, you can split the requirement into smaller chunks.

You can use either the endless cycle or back and forth methods to automate this – you’ll just have more standing orders in action.

Let’s say you have an account requiring £2,000 each month, you could use the same £500, and just deposit it and withdraw it four times to total a cumulative £2,000.

Account fees

Reward accounts are great – though you normally need to pay for them. As long as you’re making more that you put in then they can be worth it.

Direct debits

Quite a few switching offers and perks require a couple of direct debits each month. Often it’ll say ‘active’ direct debits, which technically could include any payment that has been taken in the last year.

But for the most part these direct debits have to come out every month to qualify – ruling out annual or quarterly payments.

If you run out of the obvious direct debits, there are a few easy ones you can set up which won’t cost you anything.

Collect rewards

Not all accounts will pay directly into your account. Instead, you sometimes need to cash out your payments.

  • NatWest Reward (You need to log into the MyRewards site)
  • RBS Reward (You need to log into the MyRewards site)

Log into the app

There’s one final ongoing requirement with some accounts – you might need to log in to your online banking or app on a regular basis.

How I manage multiple accounts

Andy’s top 3 current account perks

Making sure everything is OK

The standing orders and direct debits should all take care of themselves, but I’ll always check in. In part that could be required to trigger a reward, or to claim the perk itself.

But most importantly it’s to ensure nothing has gone wrong and there’s no risk of going overdrawn. I’ve set up two spreadsheets to keep an eye on things.

The first tells me all the standing orders and direct debits in and out of each account. If I need to amend the size of a standing order (for example when switching banks), I know exactly which is which. It only updates if I change bank.

The other spreadsheet is more active. Every month I open up the apps for my accounts and write down the balances. I try to do this in the first week of the month. This way I know exactly how much I have in each account, and overall.

What each account requires

Minimum transfers

These accounts that require a minimum deposit each month to trigger perks. Remember some bank switch offers might also require this.

Account (a-z)PerkMonthly deposit required
Barclays Blue RewardsFree Apple TV+£800
Bank of Scotland Vantage3% interest on £4,000 to £5,000£1,000
Chase 1% cashback on groceries and travel spend£1,500
Halifax RewardsNo fee£1,500
Club LloydsFree Disney+ w/ ads or 6 cinema tickets and no fee£2,000
Nationwide FlexDirect5% interest and 1% cashback (year 1 only)£1,000
NatWest Reward£2 reward after fee£1,250
RBS Reward£2 reward after fee£1,250
Santander Edge1% cashback on bills£500

Account fees

You’ll need to pay a monthly fee to have the following accounts, though in a couple of cases you can avoid paying this.

Account (a-z)PerkMonthly fee
Barclays Blue RewardsFree Apple TV+£5
Halifax RewardsNo fee£3 (avoided if you deposit £1,500 a month)
Club LloydsNo fee£5 (avoided if you deposit £2,000 a month)
Monzo PerksFree railcard, Uber One, free cinema tickets, free Greggs£7
NatWest Reward£5£3
RBS Reward£5£3
Santander Edge1% cashback on bills & 6% saver£3
TriodosEthical banking£3
TSB Spend & Save Plus£5 a month£3

Direct debits

You won’t want all of these accounts, but just to give you the full idea, here are the account perks that require direct debits.

Account (a-z)PerkDirect debits required
Club Lloyds3% interest on £4,000 to £5,000Two
Halifax Reward3% interest on £4,000 to £5,000Two
NatWest Reward£2 reward after feeTwo
RBS Reward£2 reward after feeTwo
Santander Edge1% cashback on billsAt least two
Zopa Biscuit2% cashback on direct debitsAt least one

Debit card spend

This is a more common requirement for bank switching, but you might need to use your debit card for some perks

Account (a-z)PerkDebit card use
Chase Bank1% cashbackCapped at £1,500 spend a month
Nationwide FlexDirect1% cashback for one yearCapped at £500 spend a month
TSB Spend & Save£5 cashback for six months20 payments a month
TSB Spend & Save£5 cashback20 payments a month
Trading 212Up to 1.5% cashbackCapped at £15 cashback a month

Collect rewards

These accounts require you to manually withdraw rewards.

  • NatWest Reward (You need to log into the MyRewards site)
  • RBS Reward (You need to log into the MyRewards site)

Log into the app

You must log in to the app to qualify for these accounts.

  • NatWest Reward – every month
  • RBS Reward- every month

Read next

March 29, 2021   |   Articles

The best bank mobile apps

Written by
How do Starling and Monzo compare to the apps from the high street banks?

App banking is getting bigger and bigger. I very rarely log in to online banking on a computer, hardly ever visit a branch and only phone up when there’s a problem.

So it’s vital that I can do everything I need to do on my app. And sadly my main bank for years – Nationwide – is really limited, requiring a card reader to add new payees and missing many of the features that started on new digital banks but increasingly copied by established banks.

I’d go as far as to say that how good a bank’s app is the number reasons to choose a bank for your everyday banking.

Watch my full analysis in this video, or keep reading to see the features broken down app by app.

Bank features compared

I’ve compared the features on 13 different banking apps, from digital challengers Monzo, Starling and Revolut through to high street titans Barclays, Halifax and HSBC.


You can view the full spreadsheet here Best-Bank-Apps-29-03-21Download

My top app banking features

So, what do I look for in a banking app? There are all sorts of things you can do – from adding photos of your receipts to individual transactions through to paying in a cheque. Lots of nice to haves.

But there are some basics which are essential – and surprisingly not all banks offer them. Here’s what I’ll check if I am going to use an app.

How easy is it to use?

Ease of use and being able to find everything are really important. Of course the more you use an app, the more familiar it’ll be, but there are some apps which are better than others

Can I set up new payees and amend existing ones?

I hate it when an app won’t let me do everyday things such as set up a new payee or amend a standing order. These are essentials that mean I’ll be able to do the basics whenever I want.

Sometimes there are payment limits on large transactions, largely to combat fraud, and I’m ok with these. It’s rare I transfer big sums so it’s only an occassional inconvenience.

Does it offer instant notifications?

More banks now offer this on their apps, and it’s a handy budgeting feature. You’ll get a notification on your phone as soon as the payment processes allowing you do check the amount is correct and also get aheads up of any fraud.

Can I search old transactions?

I want an app that’ll go back for at least 18 months and also offer filer options such as payments in or out.

Can I copy my account details?

This innovation is simple but so useful. With a couple of taps I can copy by account number and sortcode to share with people, or to enter into direct debit forms.

Does it let me control the card

Finally, it’s essential that my banking app lets me freeze my card. This is a security measure where you can stop anyone using your card if you lose it.

Extra app features I love

I’m a happy camper if the app contains all of the above, but there are extras offered by some banks which you might not be aware exist.

Look out for:

  • Able to pay in a cheque (read more on this here)
  • Able to see PIN
  • Able to see debit card number etc
  • Savings pots & features
  • Virtual debit cards

App features you don’t really need

Of course, just because a bank app does something all shiny and new, it doesn’t mean you need it.

The biggest one here is being able to add other bank accounts to your app dashboard via Open Banking. This is a great idea, but the banks that do offer it only allow you to connect to a small range of banks.

You’re better off going for an app that is designed for and allows you to connect credit cards such as Yolt or Money Dashboard.

Similarly the auto-savings feature you’ll see with most banks (except Monzo) is a variation of the “Save the change” or “top-up” method where small amounts are transferred from your main account to a savings pot when you spend. There are better options out there, such as those from Plum and Chip.

My top bank apps

So taking the above into account, which apps get my vote?

Monzo & Starling

As you’d expect, the banks which have been created from scratch to work primarily via apps are the best. You can do pretty much everything and more.

I really like the savings and budgeting features in Monzo, especially the way you can connect to IFTT to gamify savings.

If you want to have an easy life banking, then Starling does everything really well.

Revolut is worth a shout too, particularly for its virtual and disposable debit card feature. But as a bank I prefer the other two.

Barclays, Halifax & Lloyds

If you want to stick with an established bank then I was surprised to see how far along Barclays, Halifax and Lloyds have come.

The best bank rewards and switch bonuses

Check out my list of all the offers you can get when opening a new current account

best bank switching offers

Bank-by-bank app feature lists

Here’s where you can see what each bank offers.

Barclays app

SavingsSavings potsNo
Auto savingsNo
BankingEasy transferyes
New payee in appNeed debit card
New SOYes
change SOYes
pay in chequeYes
share account detailsYes
BudgetingAnalyse spendingYes
Set BudgetNo
Add other banksYes

Bank of Scotland
Halifax
Lloyds
Nationwide
NatWest
RBS
Santander
Instant notificationsYes
See upcoming regular paymentsYes
See pending paymentsYes
Go back more than one year3 years +
Filter in/outYes
Download statementsPDF
Add receipts/notesNo
ManagementFreeze cardYes
See PinYes
See card numberNo
Order new cardYes
Gambling blocksYes
Spending controls (eg block contactless)Yes
Update personal infoYes
Biometric log inYes

First Direct app

SavingsSavings potsNo
Auto savingsNo
BankingEasy transferYes
New payee in appYes
New SONo
change SONo
pay in chequeYes
share account detailsNo
BudgetingAnalyse spendingNo
Set BudgetNo
Add other banksNo
Instant notificationsNo
See upcoming regular paymentsYes
See pending paymentsYes
Go back more than one year6 months
Filter in/outYes
Download statementsPDF
Add receipts/notesNo
ManagementFreeze cardYes
See PinNo
See card numberNo
Order new cardYes
Gambling blocksYes
Spending controls (eg block contactless)No
Update personal infoYes
Biometric log inYes

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Halifax app

The Halifax Rewards account can earn you £5 a month so it’s worth looking at. Here’s my review.

SavingsSavings potsNo
Auto savingsYes
BankingEasy transferyes
New payee in appYes
New SOYes
change SOYes
pay in chequeYes
share account detailsyes
BudgetingAnalyse spendinglimited
Set BudgetNo
Add other banksYes

Bank of Scotland
Barclays
Barclaycard
First Direct
Lloyds
M&S Bank
MBNA
Nationwide
NatWest
RBS
Santander
Instant notificationsYes
See upcoming regular paymentsyes
See pending paymentsYes
Go back more than one year3 years +
Filter in/outNo
Download statementsPDF
Add receipts/notesNo
ManagementFreeze cardYes
See PinYes
See card numberNo
Order new cardYes
Gambling blocksyes
Spending controls (eg block contactless)yes
Update personal infoYes
Biometric log inYes

HSBC app

As I don’t have the app for this bank there are a few TBCs here.

SavingsSavings potsNo
Auto savingsNo
BankingEasy transferYes
New payee in appYes
New SOYes
change SOYes
pay in chequeYes
share account detailsNo
BudgetingAnalyse spendingNo
Set BudgetNo
Add other banksNo
Instant notificationsRolling out
See upcoming regular paymentsBalance After Bills
See pending paymentsYes
Go back more than one yearTBC
Filter in/outTBC
Download statementsPDF
Add receipts/notesTBC
ManagementFreeze cardYes
See PinNo
See card numberNo
Order new cardYes
Gambling blocksYes
Spending controls (eg block contactless)TBC
Update personal infoYes
Biometric log inYes

Lloyds app

The Club Lloyds account is a decent bet for freebies and interest on savings. Here’s my review.

SavingsSavings potsNo
Auto savingsYes
BankingEasy transferyes
New payee in appYes
New SOYes
change SOYes
pay in chequeYes
share account detailsyes
BudgetingAnalyse spendinglimited
Set BudgetNo
Add other banksYes

Bank of Scotland
Barclays
Barclaycard
First Direct
Halifax
M&S Bank
MBNA
Nationwide
NatWest
RBS
Santander
Instant notificationsYes
See upcoming regular paymentsyes
See pending paymentsYes
Go back more than one year3 years +
Filter in/outNo
Download statementsPDF
Add receipts/notesNo
ManagementFreeze cardYes
See PinYes
See card numberNo
Order new cardYes
Gambling blocksyes
Spending controls (eg block contactless)yes
Update personal infoYes
Biometric log inYes

Monzo

This looks at the free Monzo account. The paid options have some added features. Here’s more on Monzo Plus and Monzo Premium.

SavingsSavings potsYes
Auto savingsYes
BankingEasy transferYes
New payee in appYes
New SOYes
change SOYes
pay in chequeNo
share account detailsYes
BudgetingAnalyse spendingYes
Set BudgetYes
Add other banksNot on free
Instant notificationsYes
See upcoming regular paymentsYes
See pending paymentsYes
Go back more than one yearYes
Filter in/outYes
Download statementsPDF, CSV, QIF
Add receipts/notesYes
ManagementFreeze cardYes
See PinYes
See card numberYes
Order new cardYes
Gambling blocksYes
Spending controls (eg block contactless)No
Update personal infoYes
Biometric log inYes
ExtrasPay friends instantly
Split bill

Nationwide app

As much as I love Nationwide as building society, I really hate the app. Here’s my review of the Nationwide FlexDirect account.

SavingsSavings potsNo
Auto savingsYes
BankingEasy transferYes
New payee in appNo
New SONo
change SONo
pay in chequeNo
share account detailsNo
BudgetingAnalyse spendingNo
Set BudgetNo
Add other banksNo
Instant notificationsNo
See upcoming regular paymentsNo
See pending paymentsNo
Go back more than one year15 months
Filter in/outNo
Download statementsNo
Add receipts/notesNo
ManagementFreeze cardYes
See PinNo
See card numberNo
Order new cardYes
Gambling blocksNo
Spending controls (eg block contactless)No
Update personal infoNot address
Biometric log inYes

Natwest

SavingsSavings potsNo
Auto savingsNo
BankingEasy transferYes
New payee in appYes
New SOYes
change SOYes
pay in chequeNo
share account detailsYes
BudgetingAnalyse spendingYes
Set BudgetYes
Add other banksYes

Allied Irish Bank
Bank of Scotland
Barclays
Danske Bank
First Direct
First Trust
Halifax
HSBC
Lloyds
Monzo
Nationwide
NatWest
RBS
Santander
Ulster Bank
Instant notificationsYes
See upcoming regular paymentsNo
See pending paymentsYes
Go back more than one yearYes
Filter in/outYes
Download statementsPDF
Add receipts/notesNo
ManagementFreeze cardYes
See PinNo
See card numberNo
Order new cardYes
Gambling blocksYes
Spending controls (eg block contactless)Yes
Update personal infoNo
Biometric log inYes
ExtrasGet cash

Revolut

SavingsSavings potsYes
Auto savingsYes
BankingEasy transferYes
New payee in appYes
New SOYes
change SOYes
pay in chequeNo
share account detailsYes
BudgetingAnalyse spendingYes
Set BudgetYes
Add other banksYes

Amex
Bank of Scotland
Barclays
Danske
First Direct
HSBC
Halifax
Lloyds
M&S Bank
Monzo
Nationwide
Natwest
RBS
Santander
Starling
TSB
Ulster Bank
Instant notificationsYes
See upcoming regular paymentsYes
See pending paymentsYes
Go back more than one yearTBC
Filter in/outTBC
Download statementsPDF, XLS
Add receipts/notesYes
ManagementFreeze cardYes
See PinYes
See card numberYes
Order new cardYes
Gambling blocksYes
Spending controls (eg block contactless)No
Update personal infoYes
Biometric log inYes
ExtrasVirtual Card
Group bills

Santander

Another app I don’t currently have access to so there are a handful of gaps.

SavingsSavings potsNo
Auto savingsNo
BankingEasy transferYes
New payee in appYes
New SOYes
change SOYes
pay in chequeNo
share account detailsYes
BudgetingAnalyse spendingLimited
Set BudgetNo
Add other banksNo
Instant notificationsTBC
See upcoming regular paymentsTBC
See pending paymentsYes
Go back more than one yearTBC
Filter in/outYes
Download statementsTBC
Add receipts/notesTBC
ManagementFreeze cardYes
See PinYes
See card numberNo
Order new cardYes
Gambling blocksYes
Spending controls (eg block contactless)Yes
Update personal infoTBC
Biometric log inYes

Starling

Starling is a feature packed app. Here’s my full review of the account.

SavingsSavings potsYes
Auto savingsYes
BankingEasy transferYes
New payee in appYes
New SOYes
change SOYes
pay in chequeYes
share account detailsYes
BudgetingAnalyse spendingYes
Set BudgetYes
Add other banksNo
Instant notificationsYes
See upcoming regular paymentsYes
See pending paymentsYes
Go back more than one yearYes
Filter in/outNo
Download statementsPDF, CSV
Add receipts/notesYes
ManagementFreeze cardYes
See PinYes
See card numberYes
Order new cardYes
Gambling blocksYes
Spending controls (eg block contactless)Yes
Update personal infoYes
Biometric log inYes
ExtrasSplit bill

TSB

This is for the Spend & Save account. Older accounts don’t have the savings pots feature.

SavingsSavings potsYes
Auto savingsYes
BankingEasy transferYes
New payee in appYes
New SOYes
change SOYes
pay in chequeNo
share account detailsYes
BudgetingAnalyse spendingNo
Set BudgetNo
Add other banksNo
Instant notificationsNo
See upcoming regular paymentsNo
See pending paymentsYes
Go back more than one yearYes
Filter in/outNo
Download statementsNo
Add receipts/notesNo
ManagementFreeze cardNo
See PinNo
See card numberNo
Order new cardYes
Gambling blocksNo
Spending controls (eg block contactless)No
Update personal infoNot Address
Biometric log inYes

Virgin Money

Here’s my review of the Virgin Money M Plus account, including a video looking at the app in more detail.

SavingsSavings potsYes
Auto savingsNo
BankingEasy transferYes
New payee in appYes
New SOYes
change SOYes
pay in chequeYes
share account detailsYes
BudgetingAnalyse spendingYes
Set BudgetYes
Add other banksNo
Instant notificationsYes
See upcoming regular paymentsYes
See pending paymentsYes
Go back more than one yearTBC
Filter in/outYes
Download statementsPDF
Add receipts/notesNo
ManagementFreeze cardNo
See PinNo
See card numberNo
Order new cardYes
Gambling blocksNo
Spending controls (eg block contactless)No
Update personal infoNo
Biometric log inYes
March 14, 2021   |   Articles

Premium Bonds: Are they better than savings accounts?

Written by
Will you get £1million, or will you get nothing?

With interest rates so low there’s been a huge increase in the amount of money invested in Premium Bonds as people hope to get a better return on their cash.

But hope is the key here. Though there’s a chance you could win £1 million, there’s no guarantee you’ll get anything.

Here’s what you need to know about Premium Bonds, and how they compare to other savings products.

Keep reading or watch this video (or both)

What is a Premium Bond?

A Premium Bond is essentially a government savings account you buy from National Savings & Investments.

Rather than earn interest on the money invested as you would with a normal savings account (if it’s offered of course), you’ll be entered into a monthly prize draw. And this will keep happening for as long as you keep the Premium Bond.

Each bond costs £1, though there’s a minimum purchase of £25, which would give you 25 entries into that draw. The most you can have are 50,000 bonds, which means there’s a cap of £50,000 you can save.

Any money you win is tax-free and your savings are protected by the Treasury, and that initial investment can’t lose value.

The money is easy-access and you can cash them in whenever you want – though it can take up to eight working days to reach your linked current account.

How much could you win?

The top prize is £1 million, and there are two of these available each month. So in theory you could win £24 million a year! But of course you won’t.

The current prize rate with Premium Bonds is 1.4% (it was 1% from December 2020 to May 2022, and could change again). This doesn’t mean you’ll get a 1.4% return on your savings. Instead on average £1.40 is paid out for each bond. On average.

But most bonds win nothing. Zero.

And that’s because all the money paid out to all the winners is made out of prizes ranging from £25 up to that £1 million. So it’s impossible for every bond to get that quid.

Here are all the prizes on offer for June 2022

Prize valueNumber of prizes each month
£1,000,0002
£100,00010
£50,00019
£25,00040
£10,00098
£5,000196
£1,0002,764
£5008,292
£10037,922
£5037,922
£254,747,097
Prizes for the May 2022 draw. You can see monthly updates on the NS&I website

So though you’re more likely to get a £25 prize than any of the larger ones, it still leaves 100 billion bonds winning nothing each month!!

And while each bond has an equal chance of winning any of the prizes, the more bonds you have the greater the chance is that you’ll win something.

Money Saving Expert has a calculator which works out what you’d get with a typical amount of luck which is helpful to get a closer idea of a more realistic return – though of course since it’s all random it’s no guarantee. You can also see how lucky you are compared to others.

Premium Bonds vs savings accounts

* The following tables are based on a 1% prize rate and will be updated in June 2022 *

I’ve used MSE’s calculator to work out those potential winnings (based on average luck) over a year and therefore what interest rate you’d need to get the same amount from a savings account.

Amount savedAverage winningsEquivalent interest rate
£10000%
£1,00000%
£10,000£750.75%
£25,000£2000.8%
£50,000£4500.9%

Of course you can still win a prize with just £25 worth of Premium Bonds, it’s just incredibly unlikely. The calculator also says you’ll likely win £50 with £5,000 saved, which is 1%, but that seems to be a bit of a blip. Having fewer bonds will mean you’ll win less, so I’ve not put it in this table.

Right so how do these rates compare?

Well the best easy-access account right now pays 0.5%. So you’re likely to beat this with Premium Bonds for savings above £5,000.

But as I frequently share, you can get higher rates on some of your cash. Here are my top picks:

AccountInterest rateMax depositInterest earned in a year
Virgin Money M Plus Account2.02%£1,000£20.20
Chip+11.25%£2,000£25
Club Lloyds Current Account0.78%*£5,000£39
Club Lloyds Monthly Saver 1.5%£400 a month£38.91
Marcus Easy Access 0.5%(£4,800 fed into the above monthly saver)£11
* 0.6% on first £4,000, 1.5% on next £1,000

As you can see, each of these accounts will get you a guaranteed better return than the average chance of luck does with Premium Bonds with the same amounts.

Though that rate is much closer with the £5,000 amount in Lloyds, remember that interest is guaranteed – plus you get freebies on top such as monthly movie rentals or cinema tickets.

If you use all these accounts listed above you’ll save a total of £12,800, making a total of £134.11 in interest over a year, which is the equivalent of 1.05%.

(N.B This calculation was before Marcus dropped its rate to 0.4%. on 16th March, but the difference is £2 less in a year).

Read more about my top three savings accounts

How much you need in savings to make Premium Bonds worth it

If you’ve got savings up to and including £12,800, I’d focus my attention on The Virgin M, Chip+1, Club Lloyds and a leading easy-access accounts.

Where you put further savings depends on how much more money you have. Less than £5,000 and you will probably be better off putting more into that Marcus account (or equivalent) and probably drip-feeding it into another regular saver.

But if you have £5,000 or more, the average luck rates suggest that you could instead move on to Premium Bonds. However, there’s an important upper limit.

Though you can put £50,000 into Premium Bonds, you don’t have to. And you probably shouldn’t.

That’s because you don’t want to have too much saved in easy-access accounts. Really you only need to have enough cash to cover one of two things – an expected expense or an emergency.

When you’re saving for a specific purchase – from a house deposit or wedding through to a holiday or new phone – you’ll know much you need access to.

The general rule of thumb for emergency savings is three to six months of essential expenses – the costs you would have to cover if you lost your income. Following the pandemic you might want to make that last a little longer.

But beyond this, with interest rates so very low in general you are better off thinking about putting any remaining cash aside for the long term, whether that’s topping up your pension, paying off your mortgage or investing in the stock market.

So, going back to that initial £12,800 in the top savings accounts, and the minimum £5,000 Premium Bonds needed to beat the best easy-access account… we’re now at a total of £17,800.

How long would that last you in an emergency? I’d imagine six months easily, probably more.

So really I think Premium Bonds only become worth a look for most people if you need to have more than £17,800 in easy-access savings.

(Update 16/3/21- the upper limit on the balance you can earn interest on with the Chip+1 account has been increased from £5,000 to £10,000. After fees this gives the equivalent interest rate on the full £10k saved as 1.06%. That is a guaranteed rate and higher than the potential return with Premium Bonds. Here’s my full analysis.)

It’s different for additional rate taxpayers

A quick note that the situation changes if you are an additional rate taxpayer (meaning you earn more than £150,000 a year). If this is you, then you won’t have a Personal Savings Allowance, which means you’ll pay tax on your interest.

The Cash ISA limit is £20,000 (and that’s shared with Stocks and Shares ISAs), so Premium Bonds can work out as the most tax-efficient way to have cash savings.

What if you fancy your chances?

Of course, you might think that it’s too much hassle spreading your cash around multiple accounts for minimal returns. And you might not be wrong there.

Let’s say you’ve got £5,000. Put it in that easy access account paying 0.5% and you’ll make £25 interest in a year.

Would you spend £25 a year on Lotto tickets or scratch cards? Well, maybe Premium Bonds is a better alternative. You might win, you might not, but you’ll keep that initial investment.

When to save with Premium Bonds

So in summary, Premium Bonds could be a good option for you if:

  • You need more than £17,400 in easy-access savings
  • You are an additional rate taxpayer
  • You just fancy a flutter
  • You’re ok with the idea of getting nothing

How to get Premium Bonds

You have to be over 16 years old to buy Premium Bonds for yourself. If you are buying them for children, the account will be held by the parents/legal guardians until the child reaches 16.

The easiest way to buy them is via the NS&I website, though you can also get them via post or on the phone.

When to buy Premium Bonds

The Premium Bond draws take place at the start of each month, but you’re only eligible for each draw on bonds that have been invested for a full month.

This means you’re better off buying them at the end of a calendar month than at any other point.

How to check Premium Bond winners

You will need to enter your account number (called a Holder Number) into the NS&I Premium Bond prize checker.

If you’ve won you’ll see just how much, and you can use the same tool to see any previous wins you might not have known about.

You can listen to me talking to Money Saving Expert’s Helen Saxon about Premium Bonds in this episode of my Cash Chats podcast.

March 5, 2021   |   Articles

M&S Bank to close all current accounts

Written by

What to do if you have a Marks & Spencer Bank current or savings account.

In August, all existing current accounts at M&S Bank will close, and the linked monthly savings account will also shut. The accounts are already closed to new customers.

All 29 in-store branches will also close at the start of July, though the bank will carry on providing credit cards, loans, insurance and other savings accounts.

The retailer says it’s “evolving” to reflect the way customers use their bank, with the branch closures a reflection of the move to online banking.

So if you’re an M&S Bank customer, what do you need to do?

Your current account

If you do nothing, the account will be frozen in August and you’ll have to contact the bank in order to access any money left in there. So it’s important you either withdraw your money and close the account or switch your account. I favour the latter.

Switching your M&S Bank account

It’s really easy to to do this via the Current Account Switch Service (CASS), and comes with a guarantee that all payments in and out will be moved to your new account. Plus, if you switch you’ll also be able to nab a freebie from a different bank keen to get your business.

If you’re overdrawn there’s no guarantee a new bank will also offer you an overdraft, so it might be worth looking at options to clear that if it’s a worry.

Switching takes seven working days, so there’s no rush to move. You’ve got time to wait and see what switching offers come along, but there are some you can get if you want to switch right away.

HSBC Advance Account: Free £125

You’ll only be able to switch to this account for the bonus if you opened your M&S Bank account prior to 1st January 2018.

If you are eligible you’ll need to transfer over two direct debits or two standing orders. The latter are really easy to set up. You’ll get the payment within 20 days of the switch completing.

First Direct: Free £100

As with the HSBC switch, you’ll need to have opened the M&S account before 1st Jan 2018. You need to pay in £1,000 within three months, and the money will be paid within 28 days of this happening.

This is a good option if you want to keep the £250 0% overdraft buffer, and First Direct is the only other bank to offer it.

Virgin Money: Free wine & charity donation

This account from Virgin Money will give you 12 bottles of Virgin Wine and a £50 charity donation via Virgin Giving.

You need to transfer or set up two direct debits and put £1,000 into the linked easy-access saver and keep both active until you’ve got your free wine.

More on these and other bank rewards and offers in my ultimate bank account guide.

Closing your M&S Bank account

You can do this by contacting M&S Bank, though you’ll need to have a zero balance first. If you don’t do this it’ll automatically be closed in August.

You will still be able to see the balance online or via the app after this date – but to access any cash left in there you’ll need to contact the bank.

Statements

You won’t be able to access old statements once the account is closed, so it’s worth downloading these.

Your monthly saver

On hearing the news I’m sure a lot of customers will be frustrated about this linked regular saver closing – it will have been the reason for lots of people to open the account in the first place.

Though the most recently opened monthly savers were only paying 1%, many will still be part way through a year set at 2.75%.

The good news is you’ll get the interest for the full year, no matter how long left you have to save. The bank will assume you’ve paid in the maximum £250 a month and add interest accordingly.

If you want to get the best rate for your savings once you withdraw it from the monthly saver, or find a new regular saver, here’s my updated list of the top paying accounts.

March 3, 2021   |   Articles

Budget 2021: What you need to know

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What you need to know about furlough, tax hikes and more.

This spring Budget, as announced by the Chancellor Rishi Sunak on 3rd March 2021 is the probably the most packed in the seven years I’ve been writing about them.

A lot of the measures where leaked in the days ahead, but there was plenty of new announcements, and I’ve compiled a list of the key ones below.

It was billed as a Budget to protect jobs, so there wasn’t a huge amount on how we’ll pay for the additional spending – but we still heard about a few of the ways money will be raised in taxes.

You can watch this round up video or keep reading

More detail will come in the next few days, and I’ll add information below as it’s revealed.

I’ll also be talking to the Financial Time’s consumer editor Claer Barrett on Friday’s episode of my Cash Chats podcast to analyse everything. You can subscribe now on your favourite podcast app so you don’t miss it.

Jobs & benefits

Furlough extended

The Coronavirus Job Support Scheme, due to end on 31st April 2021, will now finish on 30th September 2021.

Employees on furlough will continue to receive 80% of their wages up to £2,500 a month, though from the summer businesses will have to contribute some of the cash. In July it’ll be 10% of the 80%, and in August and September it’ll be 20% of the 80%.

Watch more about the furlough extension in this video

Self-employment scheme extended

Those eligible for SEISS (Self-Employment Income Support Scheme) will be able to apply for another three-month payment in April, covering 80% of profits up to £7,500.

There will also be a fifth (and final) grant to cover May to September. Those who have seen a turnover loss of 30% or more will get the same 80% (so up to £7,500). But if the turnover drop is less than 30% the grant will be reduced to 30% of those profits (capped at £2,850). It’ll be available from July 2021.

What’s also different this time is that it’ll now be based on the 2019/2020 self-assessment form, which brings in around 600,000 people who have previously missed out.

Nothing for ExcludedUK

Once more there was nothing to help the remaining 2.4m people who’ve had no support in the last year because they were limited company directors, freelancers, people on fixed term contracts or people earning a mix of PAYE and self-employment income.

Universal Credit uplift

The £20 extra weekly payment for low-income households claiming UC will be extended for six months. It will now stop at the end of September 2021. This was after a huge amount of pressure from the oppostion and other groups.

Eligible Working Tax Credit recipients will receive the same amount but as a £500 one-off payment.

The surplus earnings threshold for UC will remain at £2,500 for another year and then revert to £300.

Training grants

The government’s incentive for employers to bring on apprentices between April and September 2021 will be doubled to £3,000 per apprentice.

From June there will also be subsidised management training (Help to Grow: Management) and in the Autumn free digital training available (Help To Grow: Digital), as well as discounts on software. You can register interest here.

Tax & Savings

Green bond for savings

A new “Green bond” will be available to the public to put their savings in accounts that’ll help fund green initiatives. It’ll be from NS&I (National Savings and Investments) from the summer of 2021. The rate hasn’t been announced.

Income tax freeze

The different income tax thresholds were due to increase slightly from April 6th and this will go ahead, but they’ll stay at this level until 2026. This means:

  • The first £12,570 earned is tax free (Personal Tax Allowance, though it reduces for earners over £100k)
  • The next £37,700 is taxed at 20% (basic rate tax)
  • Earnings above £50,270 are taxed at 40% (higher rate tax)
  • Earning over £150,000 are taxed at 45% (additional tax rate)

This is really a stealth tax increase as you’ll lose out in real terms as inflation means prices you pay elsewhere will have gone up and if you get a salary increase you could be moved into the higher tax bracket.

Corporation Tax

In April 2023 Corporation Tax will jump to 25% on company profits from its current 19%.

Companies with profits of under £50,000 will see the rate remain at 19% under a “Small Profits Rate”, while the increase will be tapered above this. In total only 10% of businesses will pay the full rate (those with profits above £250,000 a year). The differnet tiers haven’t been revealed.

This is less of a blow for small businesses as was feared, especially those with smaller profits. It’s a big increase for big companies, but no doubt something the likes of Amazon and Facebook can avoid as we didn’t see a mooted digital sales tax.

Pension, capital gains and inheritance tax freezes

Other tax thresholds will stay at the same rate including Inheritance tax, Capital Gains Tax and the Pensions lifetime allowance. These will stay the same until 2026.

Booze increase frozen

All planned alcohol (Scotch, wine, cider and beer) will be frozen for another year.

Travel taxes

The petrol duty increases will also not happen in April.

Other travel taxes such as Air Passenger Duty, Vehicle Excuse Duty and company vehicle benefits will increase inline with inflation.

Housing

Stamp Duty holiday extended

The £500,000 threshold where no Stamp Duty is required will carry on for another three months in England and Northern Ireland.

Then from July until the end of September the nil-rate band will be £250,000. From 1st October it will return to the normal £125,000.

Scotland and Wales are still to announce what they are doing.

New 95% mortgage scheme

The government will guarantee mortgages for homebuyers to encourage more lenders to offer 95% mortgages. So it means you’ll be able to buy with a 5% deposit, subject to meeting the usual affordability criteria.

It’ll be capped at properties worth £600,000, but it won’t be restricted to first-time buyers or new build homes as other schemes have been.

Homebuyers will be able to fix for up to five years and the scheme will run until December 2022.

Shopping & retail

Contactless limit to increase to £100

You’ll now be able to tap your card without entering your PIN on payments up to £100. This is a massive jump up from £45, which was only increased from £30 a year ago.

It might take a short while for retailers to change systems for this to work.

VAT cut extended

The 5% rate of VAT (down from the usual 20%) for hospitality and tourism will remain until end of September.

It’ll then go to 12.5% for the next six months, before returning to 20% in April 2022.

No new schemes to get people shopping

There was no repeat of Eat Out To Help Out or similar schemes to get us shopping.

Non-essential and leisure retailer grants

“Non-essential” retailers that will be able to open in mid-April will be able to claim “restart grants” of up to £6,000 per site.

Hospitality and leisure businesses in England that will open later – such as pubs, hotels, restaurants, gyms and hairdressers – will be able to apply for grants of up to £18,000 each

There’s a similar fund set up for the other UK nations to distribute to retailers.

Business rate cut

Until the end of June, Business Rates will remain at zero for eligible retail, entertainment and leisure properties. It will be discounted by two-thirds until 31st March 2022.

Other announcements

Recovery loans scheme

Any business can apply for loans between £25,000 and £10m, with the government guaranteeing 80% of the money borrowed.

Super Deduction on tax for business investment

Companies spending money on equipment will be able to offset 130% of the cost against profits for two years.

More grants for sport and the arts

Most museums, cinemas, theatres and music venues have been closed for almost a year. An extra £300m will be added to £1.57bn Culture Recovery Fund, £18.8m going to community initiatives and £77m to Scotland, Wales and Northern Ireland.

Another £300m will go to support sports such as cricket and tennis, and there will be money for a 2030 UK and Ireland World Cup bid.

Green grants

A new national bank based in Leeds will be funding public and private green initiatives.

Funding for vulnerable groups

There will be funding for some groups:

  • An extra £19m to tackle domestic abuse
  • £10million for military veterans with mental health problems
  • A lifetime commitment for victims of the Thalidomide scandal

Visa reform for “highly skilled”

To encourage overseas workers from industries such as science, tech and engineering it’ll be easier to get a work visa via a points-based scheme.