Personal Saving Allowance

SpeedSouth

Simple yes or no this one.

Had a search and couldn't find definitive answer. I earn just over the HRT bracket, but pay into my pension by salary sacrifice which brings me well under HRT. Does this mean for PSA sake I'm eligible for £1000 interest free savings? Much like child benefit at £50k

Would it be any different if it was a non salary sacrifice scheme?

I'm approaching the £500 mark in my cash and P2P savings.

bowlhead99

If you are putting your salary into a pension it takes it out of being current year income (by simply having a lower salary in the case of salary sacrifice, or by extending the basic rate band to cover it in the case of non-salary sacrifice contributions) and so you're effectively still only a basic rate taxpayer and get the full £1000 personal savings allowance.

You do have to consider the interest income itself as something that can take you up into the higher rate bracket (even if you are using the personal savings allowance to avoid the tax on it); however, you've said your pension activity will bring you 'well under' higher rate threshold so I'd infer / presume that a thousand quid or so of interest income is not going to take you back into it.

stoozie1

The .gov website states that it is your adjusted net income which determines your PSA, so yours would be 1000 per your logic above.