💡 Attention pensioners and savvy savers! 💸
Martin Lewis has revealed a little-known tax benefit that could save you up to £6,000! That’s right, if your earnings are modest and you’ve got a tidy savings pot, you might be eligible for a special allowance that increases your tax-free savings entitlements.
Here’s the scoop: Most people know about the personal savings allowance, which lets basic rate taxpayers earn £1,000 in interest without paying tax. But did you know there’s an extra “starting savings allowance”? 🎉
This allowance can allow up to £5,000 of your savings interest to be tax-free if your earnings are low. So, combined with your personal savings allowance, that can mean a total of £6,000 in tax-free savings – something many pensioners could benefit from!
To break it down: Once you’ve used up the regular personal allowance (£12,570), you can earn an additional £5,000 from savings without tax. This decreases by £1 for every £1 of other taxable income above £12,570. So, if you make £17,570 from other sources, this benefit reduces to zero.
It’s primarily beneficial for those receiving a modest pension income but earning from their savings. For instance, if your pension is £12,500 and you earn £4,400 in savings interest, you might pay no tax thanks to this allowance. 🙌
Time to explore if this applies to you and maximise your savings! 💷
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