3 year pensioner bonds affect on marginal tax rate.

loredo21

I understand that the interest on the 3 year pensioner bonds will be paid at the end of the 3 years less tax at the standard 20%rate.


For marginal tax rate calculations, will this interest be spread over the 3 years or will it all be assumed to be earned in the last year when it is paid?

Archi_Bald

According to the NS&I website, interest, net of BR tax, is added to the accounts at each anniversary.

xylophone

https://www.gov.uk/government/publications/abolishing-the-10-rate-of-tax-on-savings-income-a-fact-sheet

if relevant to your situation.

loredo21

Thanks Archi,
The NS&I link does clearly state that interest is paid on each anniversary. So question answered.


Xylophone, thanks for the reply and pointing me to some interesting information but I could not see anything relevant to my specific question.

xylophone

Xylophone, thanks for the reply and pointing me to some interesting information but I could not see anything relevant to my specific question.

This but only if relevant which it might be to some pensioners.

'The government announced at Budget 2014 that from
April 2015, it is abolishing the 10% ‘starting-rate’
of tax for savings income and replacing it with a
new 0% rate, to provide further support for the lowest
earners.
It is also increasing the amount of savings income that
the new 0% rate applies to, from £2,880 to £5,000.
This means that anyone with a total income of less
than £15,500 will not pay any tax on their savings."

loredo21

Sorry Xylophone, I was too concentrated on looking for something on interest rate timings that I missed that little gem which you highlighted above and of which I was completely unaware.
It is very relevant to me and does now make my original question irrelevent
Thanks