Managing my money for young adults
Managing my money for young adults

This free course is available to start right now. Review the full course description and key learning outcomes and create an account and enrol if you want a free statement of participation.

Free course

Managing my money for young adults

8 Do I pay tax on the interest I earn?

Given the availability of ISAs and recent changes to taxation in the UK it is very unlikely that you will have to pay any tax on the interest you earn on your savings.

As mentioned earlier, interest earned from ISAs is tax free. On non-ISA accounts you have to earn more than £1000 in interest (in the 2017/18 tax year) to be at any risk of having tax deducted from your interest earnings. Even if you do earn non-ISA interest above the £1000 threshold, you will not be liable to tax if your other income – say from a job – is low. The fact is that for the vast majority of people in the UK no interest is now paid on interest earnings.

But you might want to check if you paid income tax on interest earnings prior to April 2016. If you did, you can apply to reclaim tax that has been deducted. You will need to complete form R40 [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] and send it to HMRC (Her Majesty’s Revenue & Customs).

MMMYA_1

Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has over 40 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to university level study, find out more about the types of qualifications we offer, including our entry level Access courses and Certificates.

Not ready for University study then browse over 900 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus