Personal Savings Allowance guide

ranciduk

I wish!

so the money I’m earning from wages this year - I.e. before April , has no effect on the savings interest I will get next July/November?

It’s only wages earned AFTER April which effects the interest - which in my case will be nothing?

MA260

It is worth monitoring your interest though out the year in Non ISA accounts as with much higher interest rates many will likely go into tax in 2022/23. There are ways to spread the interest short term before the next tax year. For instance having interest paid monthly , or in accounts where the interest is paid in the next tax year,  there might be the option of closing the account before the end of the tax year to force the interest to be paid this tax year.

Notepad_Phil

ranciduk said:

I wish!

so the money I’m earning from wages this year - I.e. before April , has no effect on the savings interest I will get next July/November?

It’s only wages earned AFTER April which effects the interest - which in my case will be nothing?

The interest you receive in the April 6th 2023 to April 5th 2024 tax year are only affected by the income you receive in the same tax year - so if you'll definitely have zero income then you'll be fine. Note, when I retired I actually had a couple of additional payslips after my last official one, so you might actually have a little income, but if you're on a normalish income then it will be fine.

ranciduk

Phew!

 Thanks a lot for clearing that up

appreciate it 👍

polymaff

ranciduk said:

Please can someone clarify my situation.

It all depends upon what happens to your circumstances in Tax Year 6th April 2023 to 5th April 2024.  With no other taxable income in that Tax Year you will owe no tax.  Things can happen, though.  That's the problem with the future.  For example, what you do with the results of your bond maturities.

D_M_C_L

The MSE article on "PSA and long-term fixed rate accounts" still states that interest will be included in the tax calculation only when it is "accessible" at the end of the term and not in the years when interest is credited to the savings account.
Comments on this forum differ but I would suggest the majority view is that HMRC are including interest in the tax calculation each year and NOT waiting till the end of the term. This is certainly my experience of HMRC and I wonder if the MSE article should be amended.
What are other people finding?  

Dazed_and_C0nfused

D_M_C_L said:

The MSE article on "PSA and long-term fixed rate accounts" still states that interest will be included in the tax calculation only when it is "accessible" at the end of the term and not in the years when interest is credited to the savings account.
Comments on this forum differ but I would suggest the majority view is that HMRC are including interest in the tax calculation each year and NOT waiting till the end of the term. This is certainly my experience of HMRC and I wonder if the MSE article should be amended.
What are other people finding?  

I think ultimately it is all down to when the bank/building society reports the interest to HMRC.

taxman1234

Here's a wee question from a thicko.

My income from work pension is only £5k
I have savings interest of £6k.

£11k in total.


Will I have to pay any tax on this?

I am assuming no tax because:

Pension covered by normal tax code?
And savings covered by PSA....the low income £5k plus the £1k savings allowance?

Am I totally wrong?

Thanks

eskbanker

taxman1234 said:

Here's a wee question from a thicko.

My income from work pension is only £5k
I have savings interest of £6k.

£11k in total.


Will I have to pay any tax on this?

I am assuming no tax because:

Pension covered by normal tax code?
And savings covered by PSA....the low income £5k plus the £1k savings allowance?

Am I totally wrong?

Thanks

Right answer (no tax) but wrong reason - all of your income (assuming nothing else unmentioned) falls within your personal tax allowance of £12,570, so none of the savings-related nil rate bands come into play.

Bigwheels1111

taxman1234 said:

Here's a wee question from a thicko.

My income from work pension is only £5k
I have savings interest of £6k.

£11k in total.


Will I have to pay any tax on this?

I am assuming no tax because:

Pension covered by normal tax code?
And savings covered by PSA....the low income £5k plus the £1k savings allowance?

Am I totally wrong?

Thanks

Personal tax code £12,570 be it earnings and interest.
Plus £5,000 starter savings rate,
Plus £1,000 personal savings allowance.

£18,570 in total tax free.
So you have £7,570 to spare, before you would pay any tax.