Income Tax On Savings

[jw47]

My son in law says that you don't pay tax on your savings unless you earn more than £150k so your savings are better in a high interest account rather then an ISA. Any views on this.

[bhg481]

Nothing to do with your income. You can earn £1000 interest on savings before you start to pay income tax on it.

[roslyn251254]

Up to £5,000 of the interest received from savings is tax-free. Depends what tax you are paying on salary too
https://www.moneyadviceservice.org.uk/en/articles/your-tax-rate

[ubasses]

If you are a basic rate taxpayer you can earn £1000 in interest tax free.
Don't necessarily rule out an ISA, if the tax rules change in any future budgets you will have missed out on each years ISA allowance to keep your savings tax free those savings tax free in the years to come. All depends on the amount of savings you have.
Higher rate tax payers get £500 tax free and over £150000 pa don not get any.

[ubasses]

The £5000 limit is only for very low income people and is tapered down for everything eaned over the tax threshold.

[Old_Geezer]

It seems these day you can put your millions in for investment and still not breach the tax free limit. Very kind of the banks, that.