Pensioners and Income Tax

kennyg123

My mother is 90 years of age and receives a State pension of under £100 per week. She has no other income. She does have a fair bit of savings.

I've noticed that some banks/building societies pay more interest on non-ISA accounts.

How much interest can she receive without having to pay tax?

kennyg123

She is allowed £9640 (State Pension + interest) before she starts paying tax?

sleepless_saver

Bit off topic, but would she be entitled to pension credit? She could have quite substantial savings and still be entitled to this benefit. For example, if she had £40k savings she would get around £9 a week in pension credit on top of her £100 pension.

Farway

sleepless_saver wrote: »

Bit off topic, but would she be entitled to pension credit? She could have quite substantial savings and still be entitled to this benefit. For example, if she had £40k savings she would get around £9 a week in pension credit on top of her £100 pension.

And should she qualify for Pension Credit, no matter how little, this can be a gateway to other benefits

margaretclare

kennyg123 wrote: »

She is allowed £9640 (State Pension + interest) before she starts paying tax?

That's right. If her total income from all sources (see below) is below £9640 she won't be paying any tax.

NB: Except for certain benefits like Attendance Allowance, which is non-taxable.

Jennifer_Jane

There's a form on the HMRC website that you can print off to complete and give to the bank so that tax is not taken off the savings. I went into this for my sister, and it appeared easy enough.

Jen

Taurus1949

My father is 93 and is not registered as a non-tax payer because of savings, and therefore pays tax on any interest earned. I have just managed to reclaim 6 years worth of tax back amounting to £2500 due to new rules for Silver Savers. Its definitely worth looking into.:j

jem16

Taurus1949 wrote: »

I have just managed to reclaim 6 years worth of tax back amounting to £2500 due to new rules for Silver Savers.

What new rules are you referring to?

st999

At least call The Pension Service on 0800 99 1234, free from a landline

Because as someone says getting pension credit leads to other things.

I thought I wasn't entitled to any until I asked. Now I don't even pay council tax now and I got a refund of some of last years council tax as well.

Stan

Taurus1949

I will find the telephone number and the forms that you require to fill in, one for each year that you are claiming and send you another message.

jennifernil

I haven't heard of any new rules.