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    Hi I'm going to make a personal savings account today. I have no idea if this means we have to pay tax or interest on savings account. I earn 23k but I've never had a savings account before. And I only recently started working.

    Thanks.
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    Your first £1000 is tax free.
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    I was under the impression that you only pay tax on savings if you're getting over £1000 (I think this changes with your income tax band) in interest per year from it? And if you're earning under a certain amount you don't pay any tax on savings at all.
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    From April 2016, there's a new personal savings allowance. Interest on savings is tax free, to a threshold of £1,000 for basic-rate (20%) taxpayers, and £500 for those who pay higher-rate tax. Tax will no longer be deducted by your bank or building society and all interest will be paid gross.
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    So if I made a savings account it should be tax free???
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    (Original post by Sarahsez)
    So if I made a savings account it should be tax free???
    Pretty much, as you'd have to have A LOT of money in savings in order to reach the threshold of interest earnings in which you would have to pay tax.
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    (Original post by Sarahsez)
    Hi I'm going to make a personal savings account today. I have no idea if this means we have to pay tax or interest on savings account. I earn 23k but I've never had a savings account before. And I only recently started working.

    Thanks.
    In the current interest rate environment you'd need to have £20k in an account paying 5% interest to be taxed.
 
 
 
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