Carers Allowance and Savings Interest

footballfan123

Hi,

Does Savings Interest affect Carers allowance in anyway? (I'm not working anymore because I look after someone)

If I claim Carers allowance, will I also get personal allowance of £12,570, plus get £5,000 starting rate for savings and also get an additional £1,000 for personal savings allowance. 

So I'll be able to earn £18,570 pounds a year of interest tax-free?


Thank you

Muttleythefrog

Only earnings through work can affect CA... not savings or any interest accrued. CA however is taxable so in relation to tax free interest it'll be lower than the figure you present as you've not included that other taxable income. You'll still be able to have significant savings without paying tax (even if not including any ISAs) unless you have other taxable income not mentioned here or you're getting interest rates way above the circa 5% typically available on the better standard products.

Brie

The gov.uk website says that your earnings must be under £151 a week.  So that's £7852 a year total.  I wouldn't have thought that interest on savings would be treated differently to other income but it doesn't specifically state anything about it.

Carer's Allowance: Eligibility - GOV.UK

footballfan123

Muttleythefrog said:

Only earnings through work can affect CA... not savings or any interest accrued. CA however is taxable so in relation to tax free interest it'll be lower than the figure you present as you've not included that other taxable income. You'll still be able to have significant savings without paying tax (even if not including any ISAs) unless you have other taxable income not mentioned here.

As Carers allowance is taxable, does that mean I can £14,311.20 a year of interest tax free?

Carers allowance is £81.90/week, a year it's £4,258.80

I don't have any other taxable income.


Thank you

kaMelo

If your tax code is 1257L then yes.

Muttleythefrog

Brie said:

The gov.uk website says that your earnings must be under £151 a week.  So that's £7852 a year total.  I wouldn't have thought that interest on savings would be treated differently to other income but it doesn't specifically state anything about it.

Carer's Allowance: Eligibility - GOV.UK

Calculating your earnings

Your earnings are any income from employment and self-employment after tax, National Insurance and expenses.

Muttleythefrog

footballfan123 said:

Muttleythefrog said:

Only earnings through work can affect CA... not savings or any interest accrued. CA however is taxable so in relation to tax free interest it'll be lower than the figure you present as you've not included that other taxable income. You'll still be able to have significant savings without paying tax (even if not including any ISAs) unless you have other taxable income not mentioned here.

As Carers allowance is taxable, does that mean I can £14,311.20 a year of interest tax free?

Carers allowance is £81.90/week, a year it's £4,258.80

I don't have any other taxable income.


Thank you

lol... I was about to say that sounds roughly right when I realised I already had calculated it in my spreadsheet for future situation of my estranged wife... it has the same figure. So 5% on savings £286,224 would be your rough line for tax.

Dazed_and_C0nfused

footballfan123 said:

Muttleythefrog said:

Only earnings through work can affect CA... not savings or any interest accrued. CA however is taxable so in relation to tax free interest it'll be lower than the figure you present as you've not included that other taxable income. You'll still be able to have significant savings without paying tax (even if not including any ISAs) unless you have other taxable income not mentioned here.

As Carers allowance is taxable, does that mean I can £14,311.20 a year of interest tax free?

Carers allowance is £81.90/week, a year it's £4,258.80

I don't have any other taxable income.

Thank you

I wouldn't necessarily refer to is "tax free", interest from ISA's is tax free/tax exempt.

But if your only non savings non dividend income is the Carers Allowance (of £4,258) and you haven't applied for Marriage Allowance then you can have £14,312 in interest without paying any tax on it.

£6,000 of it would be "taxed".  But at a 0% tax rate.