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State Pension and Starting Rate for Savings
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He can also pay by cheque or go into his bank/phone his bank and pay by bank transfer. Presumably he can do once of these if he’s not good online. Click on the link below for options to pay.
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There's a lot of political froth about people only on the state pension not being taxed but the latest seems to be that it'll only apply to people getting no more than the new state pension, your husband's state pension is more than that because he'll have some SERPS/S2P from the more generous old state pension.
Has he looked into pension credit? Though bear in mind that's means tested on both your incomes, it accounts for savings but you can still have a fair bit in savings and still be eligible. Worth checking:
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At the very least he should move his savings into ISAs if he is earning over £1,000 in interest.
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What purpose would that serve?
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The previous Chancellor stated, as long ago as the Budget Speech in October last year, that the Govt were not looking to collect small amounts of tax from pensioners whose only income is the SP. Moving the OP's husband's savings into ISAs would bring him into the scope of those included in that announcement, and might be beneficial going forward. We will probably find out in the upcoming Budget whether the current Chancellor agrees.
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The previous Chancellor said the Basic State Pension or New State Pension without increments. As the OP’s husband has state pension higher than the full new state pension then he has increments and so doesn’t fall under that scope regardless of interest.
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The word "increments" was not in the Budget speech.
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It was in the budget document itself, which is always more comprehensive than the summarised version in the speech:
4.167 State Pension and Simple Assessment – The government will ease the administrative burden for pensioners whose sole income is the basic or new State Pension without any increments so that they do not have to pay small amounts of tax via Simple Assessment from 2027-28 if the new or basic State Pension exceeds the Personal Allowance from that point. The government is exploring the best way to achieve this and will set out more detail next year.
And note there was no commitment to not collecting tax, it was not collecting tax via simple assessment, although Rachel Reeves did verbally assure Martin Lewis on TV later:
The Chancellor: "Yes. And so I make that commitment for this Parliament. You're right, 2027 looks like the time that it will cross over. We are working on a solution, as we speak, to ensure that we're not going after tiny amounts of money."
Martin: "But people will have to pay the tax. They just won't have to do a return? Or will they not have to pay the tax?"
The Chancellor: "In this Parliament, they won't have to pay the tax."
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The government expects people to live on £12,547 pa if their only source of income is the new state pension, although of course there is encouragement to make alternative arrangements over and above that, and hence auto-enrolment being introduced, etc.
Your husband evidently has a five-figure savings pot as well as a slightly higher state pension than that available to most, so is better off than many, even though it's not exactly untold riches - he may not have realised that this pension would generate a small income tax liability, but he's still taking home about 99.5% of his gross income…
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No - I suspect you might find his core state pension and any of his serps/s2p he kept after the 2016 transition calcs - was £12966.
Sorry I have no idea if they clearly split the figures out on their statements these days - they did for my mum when I was running her affairs under POA.
And IIRC thats an important distinction when it came to Reeves budget protection.
Any protection offered after the last budget - was only going to be on the actual core pension - not any S2P component - AFAIK - so not the total.
It made for some scathing attacks on Reeves promises in certain media - glossed over by others - at the time - when treasury officials had to deliver the "bad" news.
And that was only going to kick in when the core state pension - was over the ITPA £12570. Which it will now likely be - pending anything in the budget next week - next year.
Edit last year £11973, to compare with the tax return for 25/26 - so paid tax on the excess of likely serps /s2p.
Savings Tax - More complicated than that - as with the right balance - you can earn upto £18570 tax free
AS at such low incomes (sub £17570) you actually have 2 savings allowances - the £1000 everyone on 0 or basic rate tax has (reduced to £500 and then 0 at higher tax bands) and also - and a far bigger as its an upto £5000 savings "starter rate".
In your husbands case - reduced by the amount of taxable non savings income over the IT PA £12966-£12570 = 396 excess over IT PA - so £4604 remaining (if Ive got my mental arithmetic right) - so he can in fact earn £5604 in interest completely tax free that year.
£14000 for a couple is low. If you also have no earnings and no other significant savings than say the 25k @4% for £1000 interest - as otherwise it would be in ISA's under his and as married your names - doubling the annual allowances to 40k ).
And yes the state expects you to spend your savings before handing out means tested benefits - but for some benefits iirc effectively allows quite significant savings (*).
You may want to have a word with benefits office the DWP directly or citizens advice if really both living off of £14000.
You may even find you qualify for gateway benefits like pension credit guarantee - for couples that provides a basic income of £363pw - £18889 per year - and can trigger secondary benefits - like council tax reductions, free or discounted dental etc.
(*) The rules are a bit tricky - but iirc it was something like 1st 10k ignored, above 10k they assume £1 per week income for every £500 - and reduce the payment accordingly - to cap effective income at the 363 for a couple.
Your husband was only roughly on £250 pw - so if similar this year - and its your combined total income - plenty of room for a top up
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