Tax on Savings

hope this helps:
From 6 April 2015, many more people will no longer be liable for tax on their savings income, such as interest they receive on their bank and building society accounts. This is most likely to affect people with low overall
incomes, or people whose income is mainly from their savings.
You could benefit if:
•
your total taxable income in 2015-16 will be below £15,500, or
•
your total taxable non-savings income in 2015-16 (such as earnings or pensions) will be below £15,500.

just to further confuse the issue - from April 2016 there is a £1000 savings allowance (applicable to everyone not just low income savers) which does mean that the first £1000 of savings interest (I wish) is not taxable saving you theoretically £200

not sure that clarified your query - google is your friend re the changes for THIS tax year. there is a worked example on HMRC website

Thanks so much for the information much appreciated.

found this explanation is very helpful

You can receive up to £5000 savings interest tax free so effectively it is the difference between your earnings and your tax allowance + £5000. say your income is £12500 pa

example :
£10600 tax allowance + £5000 = £15600 - £12500 earnings = £3100 tax free savings interest

If your earnings are in excess of your tax allowance + £5000 then tax is payable on savings interest.

I think I finally get it - as my income is less than £15500 and my measly savings earn very little at least they will not be taxed
makes no sense to use ISAs in that case

There are more significant changes starting in April 2016 which will affect more people favourably

Sorry - missed that at end of post

Gtwice - sorry my example was the current (from April 2015) situation
the April 2016 change is still a twinkle in the givernment's eye at the moment. It is very confusing

Yes I agree- they ( and this applies to all governments, not a party political point) announce something in March for the tax year starting in 13 months time. I have already forgotten what the announced a year before to come into force now - IYSWIM.

Thanks everyone, I've got in touch with the banks and am now gross interest.