What Counts As Savings For Income Tax Purposes?

[barry1010]

We have to pay income tax on the interest of savings above £500 or £1000 depending on our tax bracket.

The government website lists savings as:

"Your allowance applies to interest from:

bank and building society accounts
savings and credit union accounts
unit trusts, investment trusts and open-ended investment companies
peer-to-peer lending
trust funds
payment protection insurance (PPI)
government or company bonds
life annuity payments
some life insurance contracts"

https://www.gov.uk/apply-tax-free-interest-on-savings

Should I declare the interest I get from my energy company? I keep several thousand pounds credit in my Ovo account because they pay 5% interest on my credit balance every month. I don't want to fall foul of the taxman but I don't want to volunteer to pay income tax.

[bobbinwales]

My guess is no as its really a discount from your energy company. You don't have to declare thinks like cashback on credit cards or topcashback eithe

[barry1010]

Good point, Bob, thanks

[bednobs]

do they really pay 5 % interest every month?, so £100 per month?

[brainiac]

They pay 5% interest every month? How do I get one of these accounts?

[Hopkirk]

... until they go bust. Good luck then.

[barry1010]

brainiac, they closed the account to new customers in September last year.

In the first year they paid 3%, second year 4% maxing out at 5% at year and subsequent years.

[bobbinwales]

dont get excited guys, its 5% pa not per month! Its guys based on average surplus intthe account. If barry keeps his account at £2000 in credit atall times thats £100 pa. It was attractive but there quite afew bank accounts and even ISAs paying more now