A study undertaken by AA Financial Services found that almost 90% of people are unaware of the Personal Savings Allowance, what it is and who it affects them.
Introduced on the 6th April 2016, the Personal Savings Allowance means that some savers will no longer pay tax on their personal savings.
The Personal Savings Allowance is available to everyone however, whether or not you qualify will depend on the tax band of the person.
– Basic-rate tax payers will not pay any tax on the first £1,000 of the interest on their savings
– Higher-rate tax payers will have an allowance of £500
– Additional-rate tax band will not receive a personal savings allowance
The combination of the Personal Savings Allowance as well as the 0% tax band on savings will mean that those who earn less than £17,000 a year will not pay any tax on their savings interest.
It should be noted that interest from Individual Savings Accounts (ISAs) does not count towards your Personal Savings Allowance as it is already tax-free.
Are you unsure as to whether or not you should be paying tax on your savings interest, or do you need advice about your savings in general? Contact us, we can help! You can call us on 0800 044 5733 or complete the form below and we will be in touch shortly.