New Tax Rules on Savings

Gollygumdrops

Hi, can any of you wiser money experts advise me on my situation and tax concerns with my savings.

I do not work currently or claim any benefits etc.
My husband works full time and is a higher rate tax payer so can only get £500 per year on savings before having to declare to tax office.

Therefore, as per ML's advice, most of the savings are in my name.

What my query is is I know normal lower tax rate payers can earn £1000 interest on savings, before having to declare it but where do I stand not earning?

How much can I earn in savings interest before I do get taxed?

Can I earn up to £11,500 in interest (as opposed to having a £11,500 wage) before tax?

Not sure if this sounds stupid but I guess I should really know!

AndyT678

I think you could actually earn up to £17,500 of interest tax free.

https://www.gov.uk/apply-tax-free-interest-on-savings/how-much-tax-you-pay

youngretired

AndyT678 is correct. You get your normal earning tax allowance plus £5000 + £1000 PSA. I don't earn any income as a housewife without any benefits (live of husband's pension) so savings are in my name.

Gollygumdrops

AndyT678

Thanks for that interesting info.

So I can earn my £11,500 non existent wage in savings interest, plus the other allowances!

That would mean I could have £1,300,000 in a normal 1.3% savings account or nearly £950,000 to invest in my current 1.9% account, before having to tell the taxman!:rotfl:

Husband will be pleased!

RG2015

Gollygumdrops wrote: »

AndyT678

Thanks for that interesting info.

So I can earn my £11,500 non existent wage in savings interest, plus the other allowances!

That would mean I could have £1,300,000 in a normal 1.3% savings account or nearly £950,000 to invest in my current 1.9% account, before having to tell the taxman!:rotfl:

Husband will be pleased!

Just out of curiosity, which is your current 1.9% account?

Gollygumdrops

RG2015

It is a 1 year fixed rate with Shawbrook - opened two weeks ago.
They have since pulled it but now offer a 1.8% 1 year fixed.

xylophone

Are you using interest paying current accounts as far as possible?

Gollygumdrops

xylophone

Yes have all the usual higher current accounts + reg savers, nationwide, Santander, First Direct etc.

I remember the old days when we could have one bank account and a good high rate savings account and leave them alone for a few years!

xylophone

I remember the old days when we could have one bank account and a good high rate savings account and leave them alone for a few years!

Ah, the dear,dead days beyond recall......

eskbanker

Gollygumdrops wrote: »

That would mean I could have £1,300,000 in a normal 1.3% savings account or nearly £950,000 to invest in my current 1.9% account, before having to tell the taxman!

I know it's not really the point you're making but of course if you had that sort of money and wanted to keep it in cash deposit form, it wouldn't be sensible to put it in a single account (unless it was with NS&I), given the FSCS protection 'only' extending to £85K per person per institution....

Gollygumdrops

eskbanker

Hence having to open so many accounts today and ensuring no one organisation has more than the £85,000 that you are guaranteed to get back! (Double for those accounts with hubby)

But there again, having the problem of where to invest £1,300,000 would be something I would gladly welcome!;)