0% tax payer pays no tax on accrued state pension

blueschorus72

Hi Dazed & Confused many thanks I had not read that particular piece but read many that come to the same conclusion...what I was not aware of was that the interest from putting the lump sum into a fixed rate saving account  would count as income - naive as that sounds - well stupid really.  I must say though for people like me with no private pension there is very little help and advice.  I spoke to 3 financial advisors who had no idea about the 0% tax applying to the lump sum! So they were unable to give me any advice or support what-so-ever...so I relied on what I found online and thought I was doing the right thing putting the money into a savings account that would support my husband and I for rest of our lives...so again £700 interest has cost me £17k!

blueschorus72

I am told I owe 17K tax for 23/24 because interest on my state pension lump sum savings account took me £700 over my personal allowance.

- I was a sole trader with a pension of under the personal allowance, but did not do a self assessment because income was below £1000 - in fact my expenses (inc capital) was way over any earnings.  Would I count as a non tax payer therefore and not pay tax as allowance would be up to £5k interest on savings?

Dazed_and_C0nfused

blueschorus72 said:

I am told I owe 17K tax for 23/24 because interest on my state pension lump sum savings account took me £700 over my personal allowance.

- I was a sole trader with a pension of under the personal allowance, but did not do a self assessment because income was below £1000 - in fact my expenses (inc capital) was way over any earnings.  Would I count as a non tax payer therefore and not pay tax as allowance would be up to £5k interest on savings?

There is no separate "allowances" for interest.

Some interest income above your Personal Allowance can be taxed at 0% but as previously explained that doesn't help with State Pension deferral lump sums.