Steve T

Thank you very much for the clarification. Just one more question please. Hypotheticaly, If I take £1k less pension income Would I be able to offset the excess £1k interest and pay no tax or are they separate matters.

Hypothetically if I only take Personal Pension Income of £12550 on a tax code of 1257L but earn savings interest of £7000 what would the tax be please? I understand that the £1k is covered by the personal savings allowance & £5K by the starting rate for savings. So am I correct in assuming that the tax payable would be 20% of the £1k that exceeds these thresholds?