Calling Maths Types - Income Tax And Savings

[barry1010]

I am hopeless at this sort of thing.  Recently widowed friend has just called with a seemingly straightforward question that has my head spinning.  She wants to know how much money she can have in ordinary savings accounts before being subject to income tax, assuming an interest rate of 4.5%. 

Her income is £13,688.56.

I am aware of the £1000 tax free limit for savers plus the additional 'up to' £5000 for low earners.

I know a few of you will work this out in milliseconds.  😊

[barry1010]

I have no idea, Maydup 🙂

[Canary42]

It's not that straightforward - she can get tax relief from any charitable donations she makes under Gift Aid.  Rather than use e amateurs on Answerbank she should disucss it with HMRC

[barry1010]

Tax relief on charitable donations only kicks in if you are a higher tax payer. Our friend pays very little tax due to her low income. 

I am confident the advice given on this thread re her savings is correct, I wanted it confirming as it seems very generous.

Our friend was also surprised and she said her savings fall 'somewhat short' of that amount.

I'll go to see her soon and talk to her more in depth about managing her finances, something she hasn't really needed to do before.