What's in store for savers in 2023?

While we all know that savings rates have increased over the last 12 months, do you know by how much? Unbelievably, in January 2022 the best easy access account was paying just 0.71% and the best 1-year bond was paying a paltry 1.36%. Today you can earn up to 2.86% on an easy access account and 4.33% on a 1-year fixed term bond! So, as we start 2023, what's next? Is there more good news to come for savers?

🔖 Read: What can savers expect in 2023?

Christmas might be over now, but there are still ways to make gifts to your loved ones - and save your estate from Inheritance Tax (IHT). The latest figures from HM Revenue and Customs (HMRC), show that the amount of money raised from this unpopular tax is at a record high level - no real surprise though considering the nil rate band threshold - so the amount over which your estate pays IHT - has remained at £325,000 since April 2009. And it is set to remain fixed until at least 2028 - by then it will be almost 20 years since the threshold has been raised!

🔖 Read: Inheritance tax receipts up 14% as freeze continues

So, bearing the above in mind, it makes sense to utilise all the allowances that you can in order to keep as much of your money for your loved ones when you pass away, rather than letting it go to the taxman. One of those allowances in called 'gifting from regular income' and it means you can give money to your loved ones now and avoid paying IHT on that money, regardless of what happens next. Is this something that might be appropriate for you?

🔖 Read: Gifting from surplus income - the exemption that could save you tax at 40%!

Last but not least is our regular Rates Rundown. This week we take a look at how last year ended, and what has happened so far in the new year. Has the last base rise, which took place in November, had any impact yet?

🔖 Read: Rates Rundown - rate rises continue to slow

That’s it from us this week. See you in a couple of weeks' time. In the meantime, why not sign up for our Weekly Best Buy Table email, delivering the top rates to your inbox once a week.

All the best

Anna

Anna Bowes
Co-founder
Savings Champion

What can savers expect in 2023?

While the last couple of weeks have been pretty quiet in the savings market, 2022 as a whole has been the busiest that I have known.

Just over a year ago, when the base rate was still at 0.10% the best easy access account on the market was paying around 0.71% AER – today Zopa is offering 2.86% AER. If you have £50,000 in an account paying 0.71%, that would produce interest of £355 a year. If you are instead earning 2.86%, your £50,000 would earn £1,430 per annum.

Of course, what has happened over the last 12 months is important, but what is likely to happen next is probably more interesting.

Will interest rates continue to rise? >>

Inheritance tax receipts up 14% as freeze continues

The latest figures from HM Revenue and Customs (HMRC) revealed that inheritance tax (IHT) receipts were up 14%, or £500 million, compared with the same period last year.

The report, published by HMRC on November 22, found that the Government has pulled in a further £4.1bn in inheritance tax receipts in the months between April and October 2022.

Why are more people paying IHT? >>

Gifting from surplus income – the under-utilised exemption that could save you tax at 40%!

With inheritance tax thresholds being frozen until April 2028 and the rate remaining at 40%, HMRC can often end up being the largest beneficiary of bigger estates, presenting a significant drag on the transfer of wealth between generations.

As a result, more and more families are choosing to pass on wealth through gifts during their own lifetimes, to allow older generations to witness their loved ones benefit from gifted wealth, but also reduce the tax burden. Gifting from surplus income is an allowance that can often be overlooked, however, when utilised properly, the allowance can have a considerable impact in reducing the amount of an estate that is chargeable at 40%.

What are the rules around gifting from income? >>

Rates Rundown - rate increases continue to slow.

It’s beginning to feel like the top of the interest rate cycle is approaching, as the improvements to the best buy accounts has all but dried up recently.

Hopefully it is just a Christmas hangover, but we’ll have to wait and see what will happen next.

What are the best rates right now? >>

Keep up-to-date with all the best savings accounts on the market

> Interest-paying Current Accounts†
> Easy Access Accounts
> Fixed Rate Bonds
> Variable Rate Cash ISAs
> Fixed Rate Cash ISAs
> Notice Accounts
> Monthly Income Accounts

> Regular Savings Accounts
> Children's Savings Accounts
> Junior Cash ISAs
> Sharia Fixed Term Accounts
> Business Easy Access Accounts
> Business Fixed Rate Bonds
> Business Notice Accounts

Our Best Buy Tables are based on whole of market research, independent and have no commercial bias, ensuring that you can rely on them to make an informed decision.

*We are occasionally paid by some providers if you click through from our Best Buy Tables and open a savings or current account with them. We will never accept a payment that compromises in any way our independent, whole of market approach to providing information on savings products. For clarity we will indicate those companies who remunerate us with an asterisk (*).

†High interest current accounts often have a number of conditions attached to qualify for the headline rate. Please ensure you carefully read the terms and conditions before proceeding. Many of these current accounts do not require customers to switch their main account.

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