Changing banking arrangements can recoup extra tax

07 April 2003
Consumers can change day-to-day banking arrangements, and reduce the burden of tax increases on their finances in the years ahead, according to Intelligent Finance.

IF claims that, taxpayers concerned about wide ranging tax increases from national insurance to council tax rises, can save an average £525 a year by reviewing their banking arrangements.

By opting for offset banking offers and switching to more competitive day-to-day banking products, consumers can reduce the amount of tax taken from their savings.

IF Chief Executive, Grenville Turner said, 'People worrying about the impact of tax increases in the year ahead should sit down and take a hard look at their banking arrangements. Taxpayers can reduce their tax bills through new offers like offset banking or taking out ISAs. They can also save a whole lot more by just moving their day to day banking to more competitive providers.'

A massive £2.7bn worth of tax was deducted at source from bank accounts in the last financial year.

According to ICM research, for Intelligent Finance the average UK adult now has £6,290 in savings and 6 million people have over £10,000 in savings accounts.

Consumers should consider offsetting savings against mortgages or other borrowings in order to save on tax, according to IF.

According to the IF figures UK bank customers could miss out on over £10 billion a year in lost or overpaid interest on their banking products in the year ahead, or £525 for each average household.

IF advises consumers to assess and overhaul their finances and states that it is important to shop around for more competitive deals.