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A new 0% tax rate!

A new 0% tax rate!

The basic rate of tax is 20%.

However, as of 6 April 2015 you will pay no tax on savings income up to £5,000, if your other income (non-savings) does not exceed £15,600 (£5,000 savings + £10,600 personal allowance). This is great news for individuals, particularly pensioners and minors, however take care if you have other sources of income.

If you have other income such as employment/self-employment, pension and rental of more than £15,600 you lose out on the 0% rate.

However recognising this, the Chancellor announced further relief for savers, regardless of other income.

From April 2016, all basic rate tax payers can receive £1,000 of interest tax free, for higher rate tax payers this is restricted to £500.

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