Can interest on bank savings be paid into a SIPP?

Is savings interest classed as income and can it be paid into a SIPP and get basic rate tax relief?

Hi,

Interest is taxed as income, but it does not count towards working out your earnings threshold for tax relief on pension payments. You can pay the interest into your pension scheme. You can see guidance here:

Check if you have unused annual allowances on your pension savings

Thank you.

Just to clarify. It doesn't count towards my total earning for this tax year? So as long as I don't go over my pension contribution allowance I can add it to my SIPP and gain tax relief? But it can only be interest earned in the current tax year. Thanks

Do I subtract the savings personal allowance and add 80% of the remainder? or just add 80% of the total gross interest? Thanks

Hi D629597,
How the payment made to a SIPP is made up is up to you. you cannot take into accounts the personal savings allowance or tax already deducted on the interest when working out what you want to pay.
Thank you.