savings?

eskbanker

Beddie said:

You have nothing to worry about unless you are a higher rate taxpayer, in which case you might pay some tax on interest. I'm assuming that will not apply to you.

OP would also have tax to pay if all of the following apply:

• their 'more than £10K' of savings generates over £1,000 of interest
• these are all outside ISAs
• total income exceeds £18,570.

dgpur

eskbanker said:

HumberFlyer said:

wasn't he referring to if you are getting say 3% interest on your savings and inflation is say running at 4%..... you are losing money.

That's undoubtedly a valid point in general, but a bizarre time to make it, since the gap between interest rates and inflation is probably wider than it's been for years just now (in the saver's favour), i.e. CPI at 1.7% with 5ish% still readily available!

He made that specific point in the show, even demonstrating, on a graph, how it is much better now than it was when inflation was higher that the best interest rates. I’m completely confused what the OP is saying, as it doesn’t seem to match any of what was talked about.

friolento

eskbanker said:

Beddie said:

You have nothing to worry about unless you are a higher rate taxpayer, in which case you might pay some tax on interest. I'm assuming that will not apply to you.

OP would also have tax to pay if all of the following apply:

• their 'more than £10K' of savings generates over £1,000 of interest
• these are all outside ISAs
• total income exceeds £18,570.

If they are a higher rate tax payer, they’d pay tax on interest from non-ISA accounts above £500. 

Many pensioners are HR tax payers, some even  pay more income tax than they receive in state pension. The wonders of Defined Benefit pensions!

eskbanker

dgpur said:

eskbanker said:

HumberFlyer said:

wasn't he referring to if you are getting say 3% interest on your savings and inflation is say running at 4%..... you are losing money.

That's undoubtedly a valid point in general, but a bizarre time to make it, since the gap between interest rates and inflation is probably wider than it's been for years just now (in the saver's favour), i.e. CPI at 1.7% with 5ish% still readily available!

He made that specific point in the show, even demonstrating, on a graph, how it is much better now than it was when inflation was higher that the best interest rates. I’m completely confused what the OP is saying, as it doesn’t seem to match any of what was talked about.

This is perhaps the danger of watching that TV show - I rarely catch it but whenever I've seen it, ML gabbles through stuff at breakneck speed in an attempt to cover a wide range of stories, so it's unsurprising that the shows are often followed by confused posts on here from those who weren't able to keep up and took the wrong message from it!

dgpur

eskbanker said:

dgpur said:

eskbanker said:

HumberFlyer said:

wasn't he referring to if you are getting say 3% interest on your savings and inflation is say running at 4%..... you are losing money.

That's undoubtedly a valid point in general, but a bizarre time to make it, since the gap between interest rates and inflation is probably wider than it's been for years just now (in the saver's favour), i.e. CPI at 1.7% with 5ish% still readily available!

He made that specific point in the show, even demonstrating, on a graph, how it is much better now than it was when inflation was higher that the best interest rates. I’m completely confused what the OP is saying, as it doesn’t seem to match any of what was talked about.

This is perhaps the danger of watching that TV show - I rarely catch it but whenever I've seen it, ML gabbles through stuff at breakneck speed in an attempt to cover a wide range of stories, so it's unsurprising that the shows are often followed by confused posts on here from those who weren't able to keep up and took the wrong message from it!

It’s definitely best watched from a recording and with finger on the pause button!

johnaka

currently paying round £33 a month in tax on my pension .
thanks for the replies.
 

friolento

johnaka said:

currently paying round £33 a month in tax on my pension .
thanks for the replies.
 

This sounds like you might be a Basic Rate Tax Payer, correct?

Whether and how much tax you need to pay on your savings interest depends on

1. your total taxable income (pensions, savings, any other taxable income)
   
2. your total savings interest

Did you read the articles I linked to earlier? Did they clarify things for you?

eskbanker

johnaka said:

currently paying round £33 a month in tax on my pension .
thanks for the replies.

If you're still puzzled by what you saw on the recent TV show (and, as above, it's not clear what you were referring to), you can always watch the relevant bits again via https://www.itv.com/watch/the-martin-lewis-money-show-live/2a1827/2a1827a0180

I found the graph about savings versus inflation by the way: