Maximum Savings Interest before I need to pay tax

Hi, My annual private pension is £4,800 a year. I'm hoping to invest in NS&I savings and receive approximately a further £12,000 interest. I am not due to receive a state pension for 5 years and I am not employed. My tax allowance is £12570, can I then use the £5,000 Starter Rate for Savings and the £1,000 PSA to reduce any tax due? I've worked out my total income is probably about £16,800. Thanks

Hi,

You would be entitled to the starter rate due to the level of your non-savings income. You will be required to complete a Self Assessment tax return if your savings interest is above £10,000 in a year. You can see guidance here:

Tax on savings interest

Thank you.

Hi HMRC, I have £0 income,only savings interest. I don't claim anything,no pension & i am single,retired. What is the max savings interest i can receive in the 2023/4 tax yr before being liable for tax? Is it £17,570 or £18,570? Also on fixed rate bonds interest is tax liable on the year of access to the interest. So a 5 yr fixed rate bond that pays interest annually into the fixed rate acc,but interest is only accessible on maturity at yr 5 is the point of tax liability? Thankyou..

Hi,
 

For 23/24 it is £17570 as you have no other income. For the fixed rate bond, as you cannot access the interest, you will declare this in the year of maturity .

Thank you. 

Hi, my wife recently retired and has no pension or regular income. She is living off my private pension and her only income is interest on her savings. As she has no other income, I understand that she can receive up to £17,570 in savings interest without paying tax. Is this correct? Also would she have to submit a self assessment tax return if her savings interest is below £17,570. This is not clarified on the ‘Tax on savings interest’ information on the Gov.uk website. Thank you

Hi Terence Wilson,
That is correct.
If the interest generated is over £10,000 a tax return is required.
Thank you. 

My current income is my state pension of £5374 and savings interest projected to be £6700.00. What is the maximum savings interest I can receive in 2024/2025 before being liable to tax? Any help much appreciated.

Hi,

Any unused tax free personal allowances can be applied to savings interest, and you may also benefit from the starting rate for savings allowance of £5000, and the tax free Personal Savings Allowance of £1000. You can see guidance here:

Tax on savings interest

Thank you.