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Tax on personal savings
I am wondering what my tax free allowance for savings interest is. I have state pension of £220 per week and an additional private pension of approx £80 per month so that equals about £12400 per year. Does this mean if I have no other income that I can earn a total of £6000 per year interest without any tax liability? Just not sure that I am understanding this correctly. Thanks.
Comments
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Yes, with income that low you'd get the starter rate for savings (0% on £5k) in addition to the personal savings allowance (0% on another £1k). For each £1 your other income is above £12,570, you'll lose £1 of starter rate for savings.
2 -
You don't pay tax on the first £12,570 of income, whatever the source, as well as on up to £6000 savings interest, as masonic describes, so about £6170 in your case.
Eco Miser
Saving money for well over half a century1 -
Presumably you haven't applied for Marriage Allowance?
1 -
Hi Op. You may find our web pages on tax on savings income useful. We have lots of examples showing how the various allowances and nil rate bands work.
Tax on savings income | Low Incomes Tax Reform Group
Hope this is useful.
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