Estimated interest query/ Pension coding

meggib

Hi
I have received a pension coding form which asks for estimated interest on savings. I am living with a member of my family but am planning on buying my own flat with my savings. Can anyone advise me how I should calculate interest.

Should I deduct what I am willing to pay for flat and calculate on remainder of savings

Thanks

zygurat789

I would imagine that the reason for tghis is to restrict your age allowance, do you have taxable income of more than £22,900.
How have you informed HMRC of your interest income in previous years, do you fill in a tax return or any other form?

meggib

No I don't have taxable income of more than £22,900.

It's just that I am shortly going to receive personal pension and so they give me correct tax code thay want to know all details. Thats fine but as I am looking at flats just now to buy and they want to know an estimate of interest for this year. It will make a huge difference once I buy my flat as to the interest I will get. Thanks

zygurat789

meggib wrote: »

No I don't have taxable income of more than £22,900.

It's just that I am shortly going to receive personal pension and so they give me correct tax code thay want to know all details. Thats fine but as I am looking at flats just now to buy and they want to know an estimate of interest for this year. It will make a huge difference once I buy my flat as to the interest I will get. Thanks

Your tax code would normally be 647L, this would be increased to 949L if you are over 65, but this will be reduced by 1 for each £20 of your taxable income (including interest) over £22,900 back to 647L.
If you are still working then your personal pension may well be taxed at base rate code BR ie 20% on all of it that is if your earnuings are over £6475.
If the interest has already been taxed at sourced and thus received net it should not make any difference to your code number (subject to the above). It is in any case an estimate and you can, therefore, say whatever you feel is reasonable ie the figure after you have bought your flat.
I am just a little concerned that you might be over 64 and the interest which makes a huge difference might put your income over £22,900.