Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Thu, 29 Aug 2024 10:12:36 GMT by MC-B EP
I have a State Pension of 13875.68 a year because I deferred taking it for a couple of years. My only other income is a bank savings account. The annual interest summary says it has earned £2494.77 (no tax deducted). It says it is my responibility to disclose and pay any tax to HMRC. I do not know what to do. Can you help please. Thank you
Posted Tue, 03 Sep 2024 09:03:00 GMT by HMRC Admin 10 Response
Hi
If your other income (income not from savings and investments) is less than £17,570 you will be eligible for a 'starting rate for savings'. The maximum starting rate for savings is £5000, every pound of other income you have that exceeds your annual Personal Allowance reduces your starting rate for savings.
For example, if your Personal Allowance is £12,570, it will be used up by the first £12,570 of your income. 
If the total of your other income is £13,875.68,  the remaining £1,305.68 (£13,875.68 minus £12,570) will reduce your starting rate for savings by £1,305.68. 
Your remaining starting rate for savings is therefore £3,694.32 (£5,000 minus £1,305.68)
If you go over your allowance and receive a pension or are employed, HMRC will change your tax code so you pay the tax automatically. However, should your income from savings and investments exceed £10,000 you will need to register for Self Assessment. 
Please see the guidance here: Tax on savings interest

You must be signed in to post in this forum.