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Persoanl Savings allowance and tax bands

GasmanT

My total income (salary plus pension from previous employer) is about £52K.However, I pay about £3K pension contributions plus £6K AVC contributions so, obviously, only pay 20% tax. In addition, I receive savings interest. I messed up by investing £10K in a 30 monrh account, but only getting interest at the end of the term, which is due soon. This, with other savings in my, rather than wifes, name will amount to about £1.5 - £2K by the end of this year.

Question: does my pension contributions, bringing my tax rate down to 20%, mean that I receive £1000 personal savings allowance, or does HMRC use the pre pension contribution to decide on the PSA level, bringng that down to £500?

I have searched extensively for this and can find no references, so maybe the answer is more obvious than I think?

Thankyou

budgetninja56

It sounds like you’re facing a common dilemma with how HMRC determines your Personal Savings Allowance (PSA). Based on what I’ve seen, HMRC typically looks at your taxable income after allowing for all permitted reductions, like pension contributions, to figure out your effective tax band. Since your taxable income lands you in the basic rate once you account for those deductions, you should indeed qualify for the £1,000 PSA. However, contacting HMRC directly or completing a self-assessment may clarify any specifics unique to your situation and help ensure there are no surprises. It’s always good to double-check since tax rules can be complex and subject to interpretation.