“This situation results in a £200 annual tax liability, reducing the interest earned from £2,000 to £1,800.
“For a typical couple, both taxpayers, with £100,000 in savings, the tax implications amount to £600 in total. This is a significant factor to bear in mind as your savings interest accumulates in your accounts.”
To minimise one’s tax bill, the wealth expert encouraged pensioners to use their ISA allowance, which allows a person to deposit up to £20,000 a year in ISAs, which are not taxed.
Pensioners aged under 75 can also still make contributions to their pension to get some tax relief. Those with a defined contribution pension may also be able to stay within lower tax brackets by taking smaller drawdown amounts.
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of withdrawals. Taking smaller withdrawals over time might help you stay within
lower tax brackets, and be clever with how you take your tax free lump sum, if you
