Martin Lewis

And it would be outside an ISA because interest inside an ISA isn't taxable and that will be tax free.

However, for each pound you have from earned income, which includes pensions above £12,570, you lose a pound of that £5,000 starting savings allowance of tax-free savings interest.

Let's do a few examples which I think should clear this up.

So if you earned £12,571, £1 above £12,570, your starting rate of savings allowance would drop to £4,999.

If you earned £13,570, a grand above the personal allowance, your starting rate of savings allowance would be £4,000.

If you earned £16,570, which is £4,000 above the personal allowance, your start from earned income, your starting rate of savings would be just £1,000.

And once you get to earnings of £17,570, you no longer have the starting rate of savings.

But remember, you do still have the personal allowance because now you're a basic rate taxpayer and that means you can earn £1,000 of savings tax-free each year.

I know it's a little bit complicated, but what it effectively means is someone who earned £12,570 from earned income and had £6,000 of interest from savings outside of ISAs could have all £18,570 tax-free.

And obviously, you'll need to do some thinking how it applies to you.

But it effectively this was set up to help people who have a low earned income and high savings interest, primarily pensioners who tend to be in that situation.

You've got savings built up over the years, but are no longer working and they're just living off pensions that are at a relatively low level.

And it works there, which is why Adrian got the question wrong.

I was expecting I don't know what you think I was expecting.

him to know about the personal savings allowance, because we've talked about that a lot.

That's the £1,000 of interest you can earn tax-free as a basic rate taxpayer, £500 of interest you can earn as a higher 40% rate taxpayer.

You don't get a personal savings allowance if you're a top 45% rate taxpayer.

But he didn't, which means the score gets even worse.

19 right and 41 wrong.

Now I'm joined by podcast producer, Matt.