DrJJ

Thank you so much for actually giving me an answer to my question! Once I found the 2 mistakes (namely that there cannot be a 29% tax rate in this context, and that the example was for a pension of £10,000 not £1,000) in your response, I understood it. Now the only fear is that HMRC might think differently about it! Today I heard that this forum is to be closed down. That will be an aweful loss for anyone trying to get any sense out of anyone, let alone in writing, about tax matters. So sad. Meanwhile, thanks again, your answer is really appriciated.

Sorry it's taken so long to respond. Thank you maxb for trying to help. I got a copy of the page you cited. Unfortunately I'm not yet any wiser. I just find it highly suspicious that it seems impossible to get a straight answer from HMRC. Anyway, thanks again.

All the examples I have seen of the Starting Savings Rate explain what will happen only when the Earned Income is less, equal or greater then the relevant allowances. I want to know what happens when someone has more savings interest after all the allowances are used up. Is only the excess of taxable savings taxed, or would one loose the £5K Starting Savings Rate altogether? For clarity, here is an example: Someone whose only Earned Income is a New State Pension and, say, £20,000 in taxable savings interest? Other examples would be someone in the same Earned Income situation but with £10k or £15K of taxable savings interest. Thanks for any enlightenment.