In Australia, the amount of savings (assets) a pensioner can have before it affects their Age Pension depends on their living situation (homeowner/non-homeowner) and relationship status, with limits for a full pension starting at around $321,500 (single homeowner) to $739,500 (couple, non-homeowner) for 2025/2026; assets above these amounts reduce the pension until it stops completely (e.g., at approx. $714,500 for single homeowners), with higher limits for non-homeowners.
For example: A single homeowner with more than $321,500 in assets will start to see a decrease in their Age Pension payments. If their assets reach $714,500, their Age Pension payments will be reduced to $0. For a non-homeowner couple, the maximum assets cut-off is $1,332,000.
No. The State Pension is not means‑tested. This means your savings do not affect whether you receive the State Pension or how much you get. However, many pensioners receive additional support on top of the State Pension.
People of pension age can have up to £10,000 savings in the bank before it affects their pension credit. So if you have savings over £10,000, it will start to count towards your income calculation. Every £500 over £10,000 will be calculated as £1 additional income per week.
Centrelink does not monitor your bank accounts in real time. Access to detailed bank information is generally limited to investigations of suspected fraud.
Assets Test
A single homeowner can have up to $714,500 of assessable assets and receive a part pension – for a single non-homeowner the higher threshold is $972,500. For a couple, the higher threshold to $1,074,000 for a homeowner and $1,332,000 for a non-homeowner.
The IRS views earned interest as part of your total gross income. For this reason, it's taxed the same amount as your ordinary income. The same goes for one-time cash bonuses, such as for a new account opening.
Pensioners might need to pay tax on their interest if it's higher than their personal savings tax allowance. You'll need to declare any interest on your self-assessment tax return if you submit one.
Starting November 2025, banks will enforce stricter identity and account verification checks under DWP's data-sharing arrangements. This means: Payments may be held if identity or bank details are not fully verified. Claimants with old or inactive accounts may need to confirm ownership.
You may inherit part of or all of your partner's extra State Pension or lump sum if: they died while they were deferring their State Pension (before claiming) or they had started claiming it after deferring. they reached State Pension age before 6 April 2016. you were married or in the civil partnership when they died.
Which Countries Have the Most Sustainable Pension Systems? Iceland, Denmark, and the Netherlands have the most financially sustainable pension systems due to well-balanced contribution rates and participation.
If you reached State Pension age before 6 April 2016 – or if you're a couple and both of you did – you might be eligible to claim Savings Credit. There isn't a savings limit for Pension Credit. However, if you have over £10,000 in savings, this will affect how much you receive.
Technically, yes – but there are significant factors to weigh before pursuing this route. While spending down your super may reduce your assessable assets and potentially increase the Age Pension you're eligible for, it's crucial to consider how this could impact your financial security and lifestyle in retirement.
Centrelink has rules about how much of your assets you can 'gift' before your pension will be affected. If you lend money to a family member the loan will be assessed as part of your assets and could affect your pension entitlement. This includes if you take out a mortgage over your home and loan the money to family.
For an Australian Disability Support Pension (DSP), how much you can have in the bank depends on your homeownership and relationship status, as it's part of your total assets, with limits around $300k-$900k for full DSP eligibility, though your payment reduces gradually as assets increase, and specific limits apply for stopping payments entirely. Key factors include your home (counted differently), other assets like cars, and how "deemed income" from savings affects your payment.
So, does cash in the bank affect pension entitlements? Yes. Centrelink considers every dollar when deciding how much pension you'll receive. The more assets you hold, the more your pension may be reduced.
Fewer people have $1 million in retirement savings than commonly thought, with around 4.6% to 4.7% of U.S. households having $1 million or more in retirement accounts, according to recent Federal Reserve data (2022), though this percentage rises for older age groups, with about 9% of those aged 55-64 reaching that milestone. However, the median retirement savings are much lower (around $88,000-$200,000), showing a large gap between averages and reality, with many retirees having significantly less, notes.
A common starting point is to estimate that you'll need about 70% to 80% of your pre-retirement income to maintain your standard of living in retirement. For example, if you earn $150,000 annually while working, you might need between $105,000 to $120,000 as a starting point in retirement.
Your State Pension is based on your National Insurance contribution history and is separate from any of your private pensions. Any money in, or taken from, your pension pot may affect your entitlement to some benefits.
If you (and your partner) are over State Pension age, the lower capital limit is £10,000. However, if you have more than £16,000 in capital, then you may not be able to claim Housing Benefit or Council Tax Support. This rule doesn't apply if you receive the Guarantee Credit part of Pension Credit.
Yes – retirement doesn't mean you're automatically free from paying any tax. The same tax rules apply as they did before you retired.
There's no set limit to how much can have in your savings account before you need to pay tax. It depends on how much interest you earn from your savings, or how much you make in investment returns, and what your Personal Savings Allowance is.
If your taxable interest income is more than $1,500, be sure to include that income on Schedule B (Form 1040), Interest and Ordinary Dividends and attach it to your return. Please refer to the Instructions for Form 1040-NR for specific reporting information when filing Form 1040-NR.
While there is no way to completely avoid paying tax on savings account interest, several legitimate strategies exist to reduce it.