Pension and Savings Interest

PENNYPincher

I have savings in several acounts for which I filled in a form R85 as a non-taxpayer, thus receiving savings interest gross. Having recently turned 60 and qualifying for a full pension (thanks for the advice Martin), will I now have to have my interest taxed at source? This will inevitably mean that I will have to claim some of it back as the state pension is below the personal allowance. Or will I be able to continue receiving gross interest, paying tax on any amount over the personal allowance?

Incidentally, I have recently received a 'Pension coding form' (P161) from the Inland Revenue asking me for the total estimated bank and building society interest (after tax), for this year. Presume they mean 2009/10? How on earth!!!

yelf

effecitively the tax on your state pension is applied by reducing your personal allowance. if this means your interest pushes you into being a basix rate payer, you will have to pay at source and reclaim what you can

PENNYPincher

thanks Yelf for your response. Pretty much confirmed what I suspected. They'll tax it, then it's up to me to try and get back what I can - why am I not surprised.:rolleyes: