AIBU to keep my inheritance in one bank account because of interest rate or am I naive

have a look at NSI I’m sure there is no limit on protection as it is backed by the government. I could be incorrect

Any interest or investment income from your inheritance will be subject to tax if it pushes you over the threshold.
It's recommended to submit a tax return for any year you may get interest/ investment income. HMRC said I didn't need to do a return when my income was all from an invested inheritance and below threshold, then they changed their minds. Fortunately I had good records.

Just jumping on OP post (sorry).

I've just received inheritance £200k and don’t work. Do I need to notify HMRC as won’t earn over my £12,500 tax allowance.

I’d be worried putting all my money in an internet bank.

I also have a Chase account and when I wanted to pay for a holiday with a few thousand I’d saved for the purpose they blocked it and made me jump through hoops. Which was reassuring from a security point of view but also inconvenient.

Also when DD changed phones it wasn’t that straightforward getting access to her Chase account.

Assuming you are a basic rate tax payer, you don't need to declare your interest from your savings in the bank @Chocoholicnightmare unless you are earning over £10,000.00 per year in interest.
The bank(s) who hold your savings and pay the interest to you, declare to HMRC how much they have paid to you in interest and your tax code is adjusted accordingly.

There are special rules if you receive inheritance.

You are covered up to a few million I think for a set period of time not just the 120,000

Just do a search on money saving expert.

Hi how do I declare it if I stop doing tax returns?

@paint101 Ns&I direct saver. Protected up to £2m I think. Much simpler than multiple accounts

Thanks, that’s really useful info. I’m selling my house later in year and was wondering how I was going to split the money up to keep it safe while I was renting and looking for a new place.

Worth repeating again.

Because the government know things like house moves don't always happen immediately, and people will be sitting with the proceeds of a house sale in their bank for a little while, you are covered for up to £1.4 million for sixth months!

The Trust was drawn up 23 yrs prior and my parents didn't even think they'd be going into care let alone which one, private, LA or whatever. This wasn't the reason they had the trust initially. As it happened Mum 23yrs later following Dads death got placed directly from hospital discharge into a BUPA care home which is a LA funded home and wasn't means tested because it was obvious she could self fund, which she did until her death. The trust was drawn up in 2003 to leave dependants as much of their hard earned money as possible. That's not unreasonable and what most people do under the circumstances. If Mum had of exhausted her savings up to the 22.5k limit or whatever it was, the LA would have stepped in to fund it. They wouldn't have classed it as deprivation of assets because how on earth could they prove that 23yrs prior you'd have any idea that you would end up in a care home.

Yes you are wrong. HMRC are able to gather information from more and more places. I work in tax and honestly it's scary what they know about people. We think cryptocurrency is going to be their next target in terms of catching people who haven't paid the correct tax.

You are more than welcome to keep it under the mattress, so no-one can steal it from you.
But then you will suffer from inflation - your money is worth less than it used to be.
So you put it in the bank, who pay you interest on it, so the value of your money does not depreciate. They give you free money. In return for this, you allow them to use your money as they see fit, in order to pay for the money they are giving you. They have many many risk controls that mean that they should be able to return your money when you ask for it, but there is inherent risk in this. If you think "putting money in the bank" means that is untouchable sums of money... that is the mattress.

Your view is simply inaccurate. Banks fail for lots of reasons: some of which have zero to do with their decisions.

Well if I put my money in the bank and it's gone it's because of what they chose to do with it/spend it on. I don't have any debts so why should I suffer because someone else can't pay? I entrusted my money to the bank and it's gone. There's not much meaningful difference between that and stealing in my view.

Is Chase interest that good? It’s where I have my current account and a small amount of everyday savings, but most of my savings are in Chip and Trading212 getting more interest/in a cash ISA

No. Debts being called in is not stealing.
Words have meaning.

Sorry that's what I meant. Nicked by the bankers.

It will come off via your PAYE

I get a tiny pension: all my dividend and savings tax is taken off there.

You legally have to declare it though.

FSCS protection is not for 'if it gets nicked'. It kicks in if the financial institution fails.

https://www.gov.uk/apply-tax-free-interest-on-savings They do report- see here under "if you're employed"

NS&I savings account. Pays ok interest and you are protected up to £2m