Tax on savings over £10K

[LesleyAnne]

Hi all,

Wondering if anyone can shed some light on something MIL is fretting over. She claims to have received a letter recently from HMRC saying that if she has more than £10K in savings, she will have to start paying income tax. She cannot now find the letter and we don't know what she is on about.

She has a basic state pension, plus a small private pension from late FIL's employer, but no other income. She is 82. Does this ring true with anyone? If anyone can point us towards any links or websites regarding this, would be helpful. Thank you

[Pet66]

My friend has had some very demanding phone calls, from supposedly HRMC. Obviously a scam. Im wondering if scam letters are sent out too. Maybe just telephone them directly with a general enquiry. I've never heard of letters sent out like that. ISAs , I believe it's 20thousand tax free any way. What a worry for you.

[susieq]

I do remember something a year or two back regarding how much interest one gets from savings; below a certain level there was no income tax to be paid and interest would be paid gross (if I remember correctly !). I must admit I keep meaning to check it for myself but haven't got round to it yet !

I suggest having a word with the Bank Manager or one of the Building Societies who will have all the details or else checking the HMRC website for information.

Does MIL get regular letters from HMRC ? Only there are a number of scams about (mainly emails I think rather than letters) purporting to come from HMRC.

[LesleyAnne]

Thanks for replies.

I have been digging around online and think it might be something to do with pension credits, as the amount you are entitled to goes down if you have £10K in the bank. However, I was sure she said she tried for Credits and her extra pension put her over the limit anyway. I will have to check again when I have time to go through all her paperwork ... she used to be spot on with filing everything and understanding what it all was, but last week was trying to give me her car log book as part of her care financial assessment as she said they needed to know she has a car for the value to be taken into account ...

Thanks again

[Chris From The Gulag]

If you have capital of up to £10,000 then this, and any income you receive from this, are ignored.

You will be treated as having assumed income on capital above £10,000 as set out above.

Unlike Pension Credit, Housing Benefit and Council Tax Support also have an upper capital limit, which is £16,000.

Direct link to the Government web site for Pension Credit :

https://www.gov.uk/pension-credit