Starting rate for savings - does tax free income from a drawdown pension count?

Small1

I have just started to receive payment from my private pension. It has been arranged so that £12,570 uses my personal tax allowance and the remainder is made up from the 25% tax free amount from the pension pot, so that I won't be paying any tax on my total annual income.  However, as my total income will be more than £18,570 ie. the eligible limit for 'starting rate for savings', I'm trying to find out if the 25% tax free pension amount I'm receiving counts in any way towards the potential £6000 interest that can be earnt tax free.  I've endeavoured to find out directly from HMRC but they were quite vague and said that they didn't think so, but there wasn't any reference source for them to clarify exactly. 

eskbanker

No, the 25% tax-free element of the pension drawdown doesn't count as taxable income.

Small1

Many thanks, although unlikely to exceed the £6,000 threshold for interest (!) its good to know that any interest over the standard allowance of £1,000 wont be taxable. 

ColdIron

Small1 said:

I'm trying to find out if the 25% tax free pension amount I'm receiving counts in any way towards the potential £6000 interest that can be earnt tax free.

No, the clue's in the name. It doesn't count towards anything as far as HMRC is concerned. It's the same as an ISA in that respect

Conversely the £6,000 starting rate for savings and personal savings allowance is not tax free, it is taxable but taxed at 0% and counts towards many bands and allowances

Dazed_and_C0nfused

Small1 said:

Many thanks, although unlikely to exceed the £6,000 threshold for interest (!) its good to know that any interest over the standard allowance of £1,000 wont be taxable. 

All interest outside an ISA will be taxable.  But some might be taxed at 0%.  Or covered by unused Personal Allowance.

You cannot use the £1,000 savings nil rate band until you have used the savings starter rate band (up to £5,000 taxed at 0%.