Savings for retired parents

xylophone

https://www.taxation.co.uk/Articles/2017/05/02/336348/tax-relief-savings-and-dividends

may also be worth a read.

jilawrence

Ah, I'm starting to understand now - it's all about taxable income, from various sources such as pensions. Thanks for the two very useful links. I will read through them and see where they stand. Appreciate your time.

Dazed_and_confused

From your previous posts it's quite possible your parents won't be able to benefit from the Personal Savings Allowance as they simply don't have sufficient income.

The Personal Allowance and (for some) starter savings rate band of up to £5000 taxed at 0% both apply before the Personal Savings Allowance becomes relevant.

If your parents taxable income is weighted in favour of one parent over the other it may be beneficial for one of them to apply for Marriage Allowance which is where one person agrees to a smaller personal allowance (10% less) and the other spouse gets a reduction in their tax.

Be very careful when looking at this as it applies on a year by year basis so what might be sensible to do now for 2017:18 tax year might not be the case for a different year i.e. low income now due to retirement but in, say 2015:16, income was higher due to wages.

There is usually no need to complete a self assessment return for small amounts of savings interest even if there is some tax to pay
(assuming there is no other reason to have to complete a return).