TAX ON SAVINGS INTEREST: what you need to do

Just doing my return; i don't understand why i'm being taxed on my savings interest when it is approx £500. It has been combined with my under £500 self employed earnings. No mention of the £1000 allowance? i'm a normal 20% tax payer.

This is so confusing.

Can we mix it up, as in if say 10k is in an ISA, but 10k is in a savings accountand combined they made over 1k, is that taxable?

Or if we make £999 in savings account and similar in an ISA?

I need clarification regarding the tax free interest on savings, we are both at state pension age, I am taxed at 20% and my wife’s only income is her state pension of £8709.12p per annum, my wife has transferred 10% of her Personal Allowance to me.
As I understand we both get a Personal Savings Allowance of up to £1000.00 on savings interest tax free.
My question is, as my wife’s income is less than £17570.00p per annum can she still claim the additional £5000.00p tax free on her savings bearing in mind my wife has transferred 10% of her tax free Personal Allowance.

I got 5.25% on a 1year fixed rate ISA with Virgin 💪

How does it work if you have a joint account? To add we are basic rate tax payers. Would you get £2000 ie £1000 each allowance?

Came here to learn about the process of paying tax when you go over the threshold, as the name of the video implied... Will there be a part 2 where you explain how this process works?

But very low interest gilts. Treat then like zero coupon bonds. As market rates plummet, the price of the gilt rises and you scoop up the capital gains tax free.

Hi, Andy or anyone explain the starting rate for saving here.

The reason jeremy hunt wont increase the £1000 personal tax allowance is the same reason he wont increase the inheritance tax threshold is simple it raises billions for the government coffers

Do you get a savings allowance aswell as a dividend allowance?

Part 2 please!! Discussing how the tax is deductible from your savings. Is it through a self assessment?

Regarding actually paying tax if you go over your threshold. How does that happen?

Andy Hi just been watch the TV and the bank of England have just voted to keep interest rate for the 3rd time at the same rate, what is the impact for savers where are we best to build savings I'm a low earner just into the new personal tax bracket I've understood about saving in a fixed rate isa and premium bonds should save into an old isa at a low rate until April 2024 or put the extra monthly amount into my pension and then look around for new isa deal I'm a beginner trying to learn about being more conscious around how to use money lots to learn

I have fixed deposit for 2 years and the interests will be paid after two years. Which tax year should I file the interests? Can I spread them into two years to minimize my tax? And I started my account in June 2022 and will end in May 2024. Should I divide the interests across three years? Thank you.

All this paying tax on savings freaks me out. I have no idea if I’m going to owe and how I go about paying it if I do!

And get a SIPP organised or pay more into it…and get that tax back…at least temporarily.

My dad put some cash for me in Premium bonds and I won 2 small prizes consecutively.

If your pension income is low, less than £12570 say £10k and the interest you earn on a large pension pot is £8k then my understanding is you will have as an allowance for personal savings of £1k, savings rate allowance of £5k and the remainder of the personal allowance £2570 in this example. The tax liability in this example would be zero as the total allowance would be £8570 and the interest earned £8k. How would you ensure that no tax is taken? Do you have to advise HMRC and do a self assessment?

How did you get the multiplier of 1.66 for higher rate payers? Should it not be 1.60?

It's still very early days on my financial freedom journey. But, I am really enjoying it so far. Just learning about how to save and where to put my money, seeing the interest come in is really empowering. Thanks for these informative videos.

How does the taxman know what interest you've earned?

Forget premium bonds. Tn24 and tn25 gov issued gilts via interactive investor and HL are the best option for higher rate tax payers. Just hold to expiry date .

Suppose I had a lump sum... Or it in a high interest bond.... But went traveling.. Therefore no income... Am I still liable to interest on anything above my tax free allowance?

Excellent explanation of how the system works. Didn’t know any of this before watching. Very many thanks.

As a high rate tax payer, I decided to go with premium bonds after making the £500 personal savings allowance. It's a gamble that I will come out somewhere near the same or better off than keeping it in a high interest savings account without the tax implications. It took me 3 months to get to the £500 and now I have maxed out the premium bond allowance. I had to wait 1 month before I saw my first payout and it was £50 compared to over £200 in a savings account. So, after month 5 I've earned £550, compared to £1000 in a savings account. I will let it run for the rest of the year and see how it looks.

If I make £800 in interest from savings, and I also have a few hundred from selling on Vinted, do I still need to pay tax? Not entirely sure about the rules surrounding Vinted / tax

What about living abroad? I live abroad in Europe and use my UK savings accounts

Premium Bond 'winnings' are tax-free, yes! But if you win, say, 50K, as soon as you receive that money you are likely to put it into a savings account where you DO pay tax! Of course, you could simply spend it but most people, I think, would not! Just a thought!

If you put money into your pension surely they will tax you on withdrawal after 25% tax free.

For real.??? They tax people savings too? Tax my fart!

I’m a higher rate tax payer and I’m earning over £1000 savings interest per month due to the recent sale of a property. My wife is also a higher rate tax payer and we have both reached our maximum ISA allowance for the year.

Is there an option to transfer our savings balance to a relative, for example, my mother, who receives no income and has a full personal allowance available, to earn savings interest tax free? Other than the risk of inheritance tax should they transfer it back to me (with interest) within 7 years, is there anything that says this can’t be done.

At the moment I’m only earning interests from savings, which came from the sale of a property, the interests may be over 20k/year could someone tell me what is my tax free allowance? Many thanks

UK Government are living in medieval time. It is high time they increase PSA and ISA allowance.

Great video. Could you please explain how tax is paid on savings? Also how do you calculate how much tax you are due to pay if you are thinking about going over your allowance ? Thanks

What microphone 🎤 you are using?

How does it work with interest on currency in a British bank? Is it converted to pounds at the end of the tax year? Or the day you receive it? Even if you keep it in the original currency?

My mother is currently not working but has 50k in her saver which she is living off. Interest is over 1k a year, will she pay tax on the interest? As she is currently not earning a wage and hasnt done for over a year.

Can anyone link the video for working out what tax bracket I will fall into? I am currently just inside the basic rate I think (on paper, higher rate but pension brings it down) however taking redundancy (approx £80k to be paid end of February) which I will use to pay off a chunk of mortgage in October when sub 2% deal ends. Now I am worried that for year end 23/24, I could even be in the top tax bracket, even though the new job is £43k.

Hello Guys, If I have a maxed out ISA and a high interest savings account for anything extra would that count as going over the personal allowance?

Hi Andy. I would also add that one largely unknown bendfit of an ISA is ability to pass this on to spouse upon death. ie If husband / wife dies you inherit snything they had in an ISA and crucially it rdtains its tax free status.

Andy I'm a basic rate tax payer but will exceed my PSA do I need to fill a self assessment tax form or do the banks building society inform HRMC

I took out the First Direct 7% saver last June, so the interest will come out when it completes in June 2024, as I'm putting in the max allowed each month of £300, I should get about £136 of interest. Would this full amount be part of the 2023/24 £500 tax free (as I'm in the 40% band) or will some of the interest be classed as mostly in the 2022/2023 tax year?

Thank you for explaining everything in simple terms, especially net gain in ISA v non-ISA savings rates 👍

I find appalling that the Government has done nothing to increase the tax limits according to this inflation scenario. It's always the working class and the savers to pick up the bill

Great video as always. Would have been nice if you had mentioned the starting rate also .. as a freelancer that is experiencing a sh1t year so far my income is very low and so I think I can earn more than £1k interest before being taxed ?

Still a bit unclear regarding tax from interest in a Cash ISA, so if I put in £20000 the interest included at the end of the year will be over £20k, so will that be taxed? Also if I put in another £20k in the following year, what happens to the interest that’s still accruing from the previous years ISA and then I also have interest being earned from the new ISA..

Hi Andy. I'm sure many low income people and pensioners would love an updated video on the £5000 starting savings allowance plus the £1000 PA totalling £6000 savings interst income per tax year being ontop of your working income tax £12570 allowance. I only get my state pension and a small private drawdown pension that keeps me below my allowance but my wife and I do have substantial savings where we take full advantage of this £6000 savings interest income allowance.

Think if you’ve maxed out your ISAs and premium bonds, popping it into the mortgage gets great returns for higher and additional rate tax payers. You still have £50k of emergency funds in the premium bonds.

As a pensioner and low income earner there is the very little known about the £5000 Starting Savings Allowance. Sadly this rarely gets mentioned and concentrate on the higher earners who actually work.
My "working" Income is (my state pension of £10,600). I'm then able to earn (actual work or private pension as income) £1970 extra to the £12570. As a low income earner I'm then also allowed the Starting Savings allowance of £5000 of Interest income, to £17570, then the Personal Allowance of £1000 savings interest, to £18570. If you actually earn extra (not savings income) above the £12570 then the £5000 is reduced proportionally, so if you earn £13570 then the Savings Starting Allowance is £4000.

I have maximum allowed in premium bonds. If I win, it gets paid into my savings account and will be taxed that way instead. So if you are maxed out in premium bonds you will probably pay tax of some description, especially if you have contributed the max to an ISA.