Have you ever stopped to think about what actually happens to the money which you earn and put into the bank? Does it hold its value? How are you taxed? Is it really keeping pace with inflation?

While the majority of us just place what little we have left over into the bank and see interest accruing, do you really follow the path from earnings to savings? If you take a step back and consider the events in question you may be surprised just how much you are losing before you even start to spend!

The tax situation in this country is depressing in some instances, when you consider that from your initial remuneration you will pay the following :-

• National Insurance
• Income Tax
• Pension Contributions (tax free)

The when you place your money into a bank account you will pay :-

• Tax on your interest 
• Possible monthly bank fees.

Many people believe that there is a large element of double taxation in here, when you consider that you have already paid tax on your remuneration, and then you are charged tax on the interest that you earn.  While currently there are some attractive interest rates available, you are not really benefiting by the amount you may think.  When you take into account inflation and the cost of living, there are actually situations when you income will be falling in relative terms.

So how can you rectify the situation?

There are a number of factors to consider, including :-

• Making full use of tax free vehicles, such as ISAs.
• Placing your money in a high interest account.
• Checking that you are paying the correct rate of tax.

When you actually sit back and consider the amount of money which is taken from you before you even touch your money it is frightening, and what do you get in return?