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Do you need to pay tax on savings?

Say if u wanted to put £5k in a savings account and you also have a job earning £20k a year. Would you need to pay tax on interest you accumulate each year?

Reply 1

Tracey1995

You only pay tax on any interest over £1000 that you earn on your savings and your earnings from a job is already taxed etc anyway for the sum you mentioned of £20 k a year So basically you need to earn more than £1000 a year in interest to pay tax on it ok.Hope this helps

Reply 2

0le

You pay tax on interest if the interest you accumulated in a year exceeds £1000. The only exception are ISA's which are typically tax free (I tink there is one for investments which is a little different).