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HMRC and tax on interest
in Savings & investments
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Forecasting your total annual interest might not be quite as easy, especially if your balances and the interest rates vary. But you wouldn't get any forecast from HMRC, or any savings provider, either. If your rough estimate suggests you might bust your PSA, just put some money into an easy access ISA, e.g. the 3% Virgin Money one. Or even into a 1 year one at 4.25%. This would compare with 3.75% and 5.3% in non-ISA accounts for BR tax payers and 5% and 7% for HR tax payers.
If your decision is between a non-ISA savings account and pension contributions, I would politely suggest you need to review the strategy for your retirement income provision.
But I digress. For savings interest, I record all deposits and withdrawals, on an individual account basis, as and when they occur. An interest payment is just another deposit, categorised as taxable or non-taxable interest, depending on whether it's a non-ISA or ISA account. That way, I don't just have an up-to-date record of my interest position but also of my balance, for individual savings accounts as well as for all of them.