Tax on savings

kb1956

I am a single pensioner and my income from pensions after tax is £17500 pa. In the last tax year I earned £1122 in interest and I didn't pay any tax on my savings. I am selling my property and will have an amount of £65000 which I am planning to put into my savings account which currently pays 4.65%. This amount will probably only stay in my savings account for 3-4 months while the purchase of my new property goes through. Do you think I will pay any tax on the interest for this short period of time 

Bigwheels1111

Do you still have the savings that gave you the £1122.

If so this 65k will cause you to pay some tax next year.

Does it matter, 80% is not as good as 100% of interest,but not to bad.

3 years ago you would have got a few quid on 65k.

£3022.50 on 65k for the year @ 4.65%.

£251.87 a month.

£50.37 Tax per month

So a bill for £200 ish for 4 months. Plus £800 for you.

You counld take out a Chip ISA and stash 20k in it at 5.1%

Easy access and tax free, Open banking is used, So near instant transfers in and out.

Better rate and no tax.

kb1956

Bigwheels1111 said:

Do you still have the savings that gave you the £1122.

If so this 65k will cause you to pay some tax next year.

Does it matter, 80% is not as good as 100% of interest,but not to bad.

3 years ago you would have got a few quid on 65k.

£3022.50 on 65k for the year @ 4.65%.

£251.87 a month.

£50.37 Tax per month

So a bill for £200 ish for 4 months. Plus £800 for you.

You counld take out a Chip ISA and stash 20k in it at 5.1%

Easy access and tax free, Open banking is used, So near instant transfers in and out.

Better rate and no tax.

Thanks for your info .....the 65k will only stay in my account for approx 4 months sp think it is worth transferring it to my 4.65% account as I will get some interest. Can I ask you another question please? I have just had an ISA account mature balance is 21k (it was paying less interest than my Marcus 4.65%) If I  decided not to transfer the 65k and only transfer the 21k would I incur any tax ? Hope this makes sense 😊

kb1956

kb1956 said:

Bigwheels1111 said:

Do you still have the savings that gave you the £1122.

If so this 65k will cause you to pay some tax next year.

Does it matter, 80% is not as good as 100% of interest,but not to bad.

3 years ago you would have got a few quid on 65k.

£3022.50 on 65k for the year @ 4.65%.

£251.87 a month.

£50.37 Tax per month

So a bill for £200 ish for 4 months. Plus £800 for you.

You counld take out a Chip ISA and stash 20k in it at 5.1%

Easy access and tax free, Open banking is used, So near instant transfers in and out.

Better rate and no tax.

Thanks for your info .....the 65k will only stay in my account for approx 4 months sp think it is worth transferring it to my 4.65% account as I will get some interest. Can I ask you another question please? I have just had an ISA account mature balance is 21k (it was paying less interest than my Marcus 4.65%) If I  decided not to transfer the 65k and only transfer the 21k would I incur any tax ? Hope this makes sense 😊

And yes I still have the account (Marcus) that I accrued the £1122 interest 

friolento

I'd definitely stick £20k into an easy access ISA for the 4 months. Chip or Zopa would be my top choice as they are very easy to manage, assuming you have a smartphone or tablet.

If your overriding objective is to avoid tax, you could also put up to £50k into Premium Bonds. They won't guarantee any returns but if you did win big, it would all be tax free.

Albermarle

kb1956 said:

Bigwheels1111 said:

Do you still have the savings that gave you the £1122.

If so this 65k will cause you to pay some tax next year.

Does it matter, 80% is not as good as 100% of interest,but not to bad.

3 years ago you would have got a few quid on 65k.

£3022.50 on 65k for the year @ 4.65%.

£251.87 a month.

£50.37 Tax per month

So a bill for £200 ish for 4 months. Plus £800 for you.

You counld take out a Chip ISA and stash 20k in it at 5.1%

Easy access and tax free, Open banking is used, So near instant transfers in and out.

Better rate and no tax.

Thanks for your info .....the 65k will only stay in my account for approx 4 months sp think it is worth transferring it to my 4.65% account as I will get some interest. Can I ask you another question please? I have just had an ISA account mature balance is 21k (it was paying less interest than my Marcus 4.65%) If I  decided not to transfer the 65k and only transfer the 21k would I incur any tax ? Hope this makes sense 😊

Does it matter, 80% is not as good as 100% of interest,but not to bad.

As above suggest you stop worrying about tax so much.

80% of something is better than 100% of nothing.