How much tax free interest can I earn ?

MouldyOldDough

I am thinking of investing £20k in a 12 month Nationwide bond at 5% so £1000 !

I have maxed out my ISA allowance.

I understand that it depends on "income" of less than £17570 ?

Does that include PIP ?

Nasqueron

Depends on income

https://www.gov.uk/apply-tax-free-interest-on-savings

molerat

If it is a taxable benefit it counts, if not it doesn't. The relevant bit in that link is this

https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6670076/how-much-tax-free-interest-can-i-earn

Assuming PIP is referring to the benefit paid by DWP then no, that isn't taxable income and as such isn't relevant to the tax due on interest (or anything else).

Depending on your other taxable income and Personal Allowance (£11,310 or £12,570) you can have up to £18,570 in taxable interest before actually paying tax on it.

There is no limit on ISA interest, the restriction there is how much you can get into an ISA in the first place.

poseidon1

https://forums.moneysavingexpert.com/discussion/6670076/how-much-tax-free-interest-can-i-earn

I assume you mean £10,000 each for self and spouse?

The Nationwide 5% bond is a £10k max over 15 months ( not 1 year) so £625 each earned over the 15 month period.

Their 1 year fixed rate bond is only 4% but with a £5 million max, so you could certainly drop a sole investment of £20k there but only earn £800.

Best to read these offerings carefully, before committing your money.

MouldyOldDough

https://forums.moneysavingexpert.com/discussion/comment/82014509#Comment_82014509

yes I suppose I did - OOPS

masonic

Since this is posted within the ISA and tax free savings section of the forum,the answer to the question in the thread title is there's no limit.

friolento

The answer to your question in the title is that there is no legal upper limit but it clearly depends on

1. the amount of money you manage to put into tax shelters (e.g. an ISA), and
2. the interest rate you get for your money in tax shelters

Though I think your question was really whether you would have to pay tax if you earned more than £1,000 in taxable interest in a given tax year. For many people the answer is yes, but there are exceptions and some people can earn up to £18,570 tax free interest https://www.moneysavingexpert.com/savings/personal-savings-allowance/

All that aside, the max you can earn from the Nationwide 5% members account is £625 as you can’t put more than £10k into it, and it’s a 15 months account. If you have a spouse who also puts £10k into such a Nationwide account, they also can only earn a maximum of £625. These amounts are personal, as are the allowances. There are no allowances for couples, and interest earnings don’t get combined.

Yorkie1

All that aside, the max you can earn from the Nationwide 5% members account is £625 as you can’t put more than £10k into it, and it’s a 15 months account. If you have a spouse who also puts £10k into such a Nationwide account, they also can only earn a maximum of £625. These amounts are personal, as are the allowances. There are no allowances for couples, and interest earnings don’t get combined.

If you put £10K into the NW 15-month 5% bond on the day you open it, you would get £631.25.