New to Retirement, savings interest ? Carer’s allowance worth claiming?

applepad

My husband is retiring on 1st July 2023, but my question is about next tax year 23/24, as this year he has income from employment aswell.

He will be drawing a works pension of £15027 plus £3991 in Carer’s allowance for me as I’m disabled Total £19018, he is under state retirement age.

So with an income of £19018 his Tax code is currently 1383M, how does the Tax free savings work? I have seen something about if your income is less than £17570 you get the starter rate of £5000? So would he be better off not claiming the Carer’s allowance? So he can have the starter rate?

He will have a £100k lump sum which will initially go into savings.

Dazed_and_C0nfused

applepad said:

My husband is retiring on 1st July 2023, but my question is about next tax year 23/24, as this year he has income from employment aswell.

He will be drawing a works pension of £15027 plus £3991 in Carer’s allowance for me as I’m disabled Total £19018, he is under state retirement age.

So with an income of £19018 his Tax code is currently 1383M, how does the Tax free savings work? I have seen something about if your income is less than £17570 you get the starter rate of £5000? So would he be better off not claiming the Carer’s allowance? So he can have the starter rate?

He will have a £100k lump sum which will initially go into savings.

Why would that be a better option?

Wouldn't 80% of something be better than 100% of nothing?

He won't have any savings starter rate band but will have the savings nil rate band (£1,000 interest taxed at 0%).

And you have your (reduced) Personal Allowance, savings starter rate band and savings nil rate band.  So potentially £17,310 before tax is actually paid on interest.

And I presume by next year you mean 2024-25 not 2023-24?