Pension savings in line for tax rebate
09 November 2009 / by Andy Davies
Pensioners who have been charged too much tax from returns on their savings could be in line for a tax windfall, HM Revenue and Customs (HMRC) has announced.
Currently, banks and building societies are required by law to deduct 20 per cent tax from interest on savings before it is paid. However, pensioners and other savers who qualify for the 10 per cent tax rate will be due a repayment if they have been taxed at a rate of 20 per cent.
Launching its new TaxBack campaign, HMRC is now encouraging pensioners who have overpaid in tax to claim back what is theirs.
In addition, HMRC is also urging non-taxpaying pensioners to register for their savings interest to be paid in gross in the future and avoid tax deductions by completing an R85 form and sending it to their bank or building society.
Encouraging savers who have overpaid to make a claim, Sarah McCarthy-Fry, exchequer secretary to the Treasury, said: “We know times are tough for many pensioners, and we don’t want anyone paying tax they don’t need to.
“If you think you might have been overpaying tax on your savings, check the figures, and make a claim if you’re eligible.”
She added: “If it doesn’t affect you, but you know someone it might – spread the word.”
For those who have been charged too much tax, claims can be made by using an HMRC R40 form.
Meanwhile, HMRC will also be sending out 3.4 million letters and guides to Pension Credit recipients to find out if they are eligible to make a claim.
© Fair Investment Company Ltd
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* Income payments and returns are dependent upon the FTSE 100 Index.
| Provider | Account | Interest Rate (AER) | Term | Apply |
|---|---|---|---|---|
 The Access Bank UK » |
3 Year Fixed Rate |
2.20% per annum |
£5,000 | Apply Now > |
| Earn 2.20% fixed interest – 3 year term – Minimum deposit £5,000 – No withdrawals permitted. FSCS Protected | ||||
The Access Bank UK » |
2 Year Fixed Rate |
2.02% per annum |
£5,000 | Apply Now > |
| Earn 2.02% fixed interest – 2 year term – Minimum deposit £5,000 – No withdrawals permitted. FSCS Protected | ||||
 Vanquis Bank » |
4 Year Fixed Rate Bond |
2.40% per annum |
£1,000 | Apply Now > |
| Earn 2.40% gross/AER fixed for 4 years. Save £1,000 – £250,000. No withdrawals during the term. Individual or joint accounts available. Annual or monthly interest. FSCS Protected | ||||
The Access Bank UK » |
1 Year Fixed Rate |
1.72% per annum |
£5,000 | Apply Now > |
| Earn 1.72% fixed interest. 1 year term, save from £5,000 to £500,000, no additional deposits or withdrawals permitted, FSCS Protected | ||||
Vanquis Bank » |
3 Year Fixed Rate Bond |
1.85% per annum |
£1,000 | Apply Now > |
| Earn 1.95% gross/AER fixed for 3 years. Save £1,000 – £250,000. No withdrawals during the term. Individual or joint accounts available. FSCS Protected | ||||
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| Provider | Account | Interest Rate | Term | Apply |
|---|---|---|---|---|
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Up to 6 years |
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| Capital protected deposit plan with the potential to mature after years 3, 4, 5 and 6. If the plan matures early it will return 5% times the number of years the plan has been in force. Also available for Cash ISA and ISA transfer. | ||||
* Income payments and returns are dependent upon the FTSE 100 Index.
| Provider | Account | Interest Rate (AER) | Term | Apply |
|---|---|---|---|---|
 RCI Bank » |
Freedom Savings Account | 1.30% | Instant Access | More Info > |
| MARKET LEADING. Earn 1.30% gross/AER. Instant Access. No notice periods. Unlimited payments and withdrawals. Pay in from £100. RCI Bank are protected up to a total of €100,000 by the FGDR, the French deposit protection scheme. Manage account online. | ||||
 Ford Money » |
Flexible Saver |
1.22% |
Instant Access | More Info > |
| Earn 1.22% AER variable interest. Interest can be paid monthly or annually. Open an account singly or jointly. Minimum deposit £1. Unlimited deposits and withdrawals permitted. FSCS Protected | ||||
 AA Savings » |
Easy Saver | 1.15% | Easy Access | More Info > |
| 1.15% gross/AER. Instant Access. Free withdrawals and no notice period. Deposit from £100. Includes a fixed bonus of 0.95% gross fixed for the first 12 months. Quick and easy online application | ||||
 Aldermore Bank » |
Easy Access Account | 1.00% | Easy Access | More Info > |
| 1.00% gross/AER on balances from £1,000 to £1 million. Unlimited withdrawals without restriction or loss of interest. | ||||
Gross is the interest you will receive before tax is deducted.
AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
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