Martin Lewis

Non, 20% of £3,400 or 20% of £4,400?

So come on, what do you know about savings allowances?

I know, I can't just look... How much can a person earn generally, the personal tax allowance, before they pay tax on it?

Do you know roughly?

Well, I think it's about £12,500, isn't it?

It is indeed.

It's £12,570.

Right.

So... So this is a question about savings allowance.

Yeah, it's all rounding.

So are you paying 20% of the entire savings interest?

Are you paying 20% of the entire savings interest bar £1,000?

Or are you not paying any tax on the savings interest?

That's the question.

So are you locking in on B?

I'm locking in on B. OK, you're locked in.

Right.

Adrian says it's 20% of £3,400.

Now, there is the personal savings allowance, which I suspect many listeners will know about, which says a basic rate taxpayer can earn £1,000 of interest a year on any form of savings without being taxed.

So with the normal personal allowance and the personal savings allowance, that would mean you would only pay 20% of tax on £3,400, not £4,400.