Pension income plus savings

Workshy1

My NHS pension is above the tax threshold so I pay income tax on it. I have savings that no generate income of more than £1000pa, but less than £10,000. There seems to be confusion on here about the need to fill out a self assessment. Any more clarity would be gratefully received. Thanks all.

Stubod

https://www.gov.uk/check-if-you-need-tax-return

Keep_pedalling

Whether you need to pay tax on your savings interest and how much you have to pay depends on the actual numbers so can you be less vague? 

boingy

Workshy1 said:

My NHS pension is above the tax threshold so I pay income tax on it. I have savings that no generate income of more than £1000pa, but less than £10,000. There seems to be confusion on here about the need to fill out a self assessment. Any more clarity would be gratefully received. Thanks all.

Based on that description you don't need to fill out a tax return. HMRC will automatically adjust your tax code to collect any tax due so it will come out of your pension payments.

If your pension income is less than £17,570 pa you can use some of the Starting Rate for Savings in addition to the £1000 Personal Savings Allowance so you may owe less tax than you think.

Details here:
Tax on savings interest: How much tax you pay - GOV.UK (www.gov.uk)

Or if you are happy to tell the forum what you earn and how much interest you expect for this tax year someone will probably calculate the tax for you!

On a related note, make sure you are making full use of your ISA allowance to reduce the tax on savings.

Dazed_and_C0nfused

boingy said:

Workshy1 said:

My NHS pension is above the tax threshold so I pay income tax on it. I have savings that no generate income of more than £1000pa, but less than £10,000. There seems to be confusion on here about the need to fill out a self assessment. Any more clarity would be gratefully received. Thanks all.

Based on that description you don't need to fill out a tax return. HMRC will automatically adjust your tax code to collect any tax due so it will come out of your pension payments.

If your pension income is less than £17,570 pa you can use some of the Starting Rate for Savings in addition to the £1000 Personal Savings Allowance so you may owe less tax than you think.

Details here:
Tax on savings interest: How much tax you pay - GOV.UK (www.gov.uk)

Or if you are happy to tell the forum what you earn and how much interest you expect for this tax year someone will probably calculate the tax for you!

On a related note, make sure you are making full use of your ISA allowance to reduce the tax on savings.

As long as that gives a better net return.

Except in niche scenarios 3% from an ISA isn't as good as paying tax on 4% outside an ISA 😉

friolento

Dazed_and_C0nfused said:

boingy said:

Workshy1 said:

My NHS pension is above the tax threshold so I pay income tax on it. I have savings that no generate income of more than £1000pa, but less than £10,000. There seems to be confusion on here about the need to fill out a self assessment. Any more clarity would be gratefully received. Thanks all.

Based on that description you don't need to fill out a tax return. HMRC will automatically adjust your tax code to collect any tax due so it will come out of your pension payments.

If your pension income is less than £17,570 pa you can use some of the Starting Rate for Savings in addition to the £1000 Personal Savings Allowance so you may owe less tax than you think.

Details here:
Tax on savings interest: How much tax you pay - GOV.UK (www.gov.uk)

Or if you are happy to tell the forum what you earn and how much interest you expect for this tax year someone will probably calculate the tax for you!

On a related note, make sure you are making full use of your ISA allowance to reduce the tax on savings.

As long as that gives a better net return.

Except in niche scenarios 3% from an ISA isn't as good as paying tax on 4% outside an ISA 😉

HR tax isn’t a niche scenario……….

boingy

Dazed_and_C0nfused said:

boingy said:

Workshy1 said:

My NHS pension is above the tax threshold so I pay income tax on it. I have savings that no generate income of more than £1000pa, but less than £10,000. There seems to be confusion on here about the need to fill out a self assessment. Any more clarity would be gratefully received. Thanks all.

Based on that description you don't need to fill out a tax return. HMRC will automatically adjust your tax code to collect any tax due so it will come out of your pension payments.

If your pension income is less than £17,570 pa you can use some of the Starting Rate for Savings in addition to the £1000 Personal Savings Allowance so you may owe less tax than you think.

Details here:
Tax on savings interest: How much tax you pay - GOV.UK (www.gov.uk)

Or if you are happy to tell the forum what you earn and how much interest you expect for this tax year someone will probably calculate the tax for you!

On a related note, make sure you are making full use of your ISA allowance to reduce the tax on savings.

As long as that gives a better net return.

Except in niche scenarios 3% from an ISA isn't as good as paying tax on 4% outside an ISA 😉

Why would you chose a 3% ISA when 5% ISAs are available? EA Savings rates and cash ISA rates are pretty much the same at present. If someone is paying tax on their interest they will almost certainly be better off in an ISA.

Qyburn

friolento said:

HR tax isn’t a niche scenario……….

Why do you say the OP is paying higher rate tax? The fact he talks about a £1,000 savings allowance suggests he isn't.

(Before anyone chips in I know that technically the "Personal Savings Allowance" isnt an "allowance", but it has the same effect in many, maybe most, scenarios.)

Dazed_and_C0nfused

friolento said:

Dazed_and_C0nfused said:

boingy said:

Workshy1 said:

My NHS pension is above the tax threshold so I pay income tax on it. I have savings that no generate income of more than £1000pa, but less than £10,000. There seems to be confusion on here about the need to fill out a self assessment. Any more clarity would be gratefully received. Thanks all.

Based on that description you don't need to fill out a tax return. HMRC will automatically adjust your tax code to collect any tax due so it will come out of your pension payments.

If your pension income is less than £17,570 pa you can use some of the Starting Rate for Savings in addition to the £1000 Personal Savings Allowance so you may owe less tax than you think.

Details here:
Tax on savings interest: How much tax you pay - GOV.UK (www.gov.uk)

Or if you are happy to tell the forum what you earn and how much interest you expect for this tax year someone will probably calculate the tax for you!

On a related note, make sure you are making full use of your ISA allowance to reduce the tax on savings.

As long as that gives a better net return.

Except in niche scenarios 3% from an ISA isn't as good as paying tax on 4% outside an ISA 😉

HR tax isn’t a niche scenario……….

True.  But having a tiny bit of extra taxable income which tips you into being a higher rate payer and losing £252 worth of Marriage Allowance would ideally be avoided 😳

Workshy1

Thanks all; I have completed self assessments before, (though not for a few years), for different reasons so am fine doing so. Obviously dont want to waste time if I dont need to. 
Pension is about £16500, income from savings, minus various ISAs, is about £1300 for '22 to '23, so the numbers would be small, but a bit more for the current year. No benefits or other tax allownaces, (not married).

boingy

Workshy1 said:

Thanks all; I have completed self assessments before, (though not for a few years), for different reasons so am fine doing so. Obviously dont want to waste time if I dont need to. 
Pension is about £16500, income from savings, minus various ISAs, is about £1300 for '22 to '23, so the numbers would be small, but a bit more for the current year. No benefits or other tax allownaces, (not married).

The good news is that you don't owe any tax based on those numbers. The Starting rate of Savings and Personal Savings Allowance cover it.

In the current year you'll only owe tax if your income plus (taxable) interest exceeds £18570. If you do owe any tax then HMRC will adjust your tax code to collect it from your pension income so no tax return required.