economy
HMRC warning as 4.5 million Britons to be hit by savings tax
Home Alone and Rocky Horror Picture Show star Tim Curry dies aged 80
TL;DR
- 4.51 million people are projected to owe income tax on savings interest in 2026/27, a 269% increase from 2022/23.
- A frozen Personal Savings Allowance and higher interest rates are creating a 'perfect storm' for savers.
- Basic-rate taxpayers are expected to see a 332% increase, with an average tax bill of £804.
- Higher-rate taxpayers will see a 275% increase, with an average bill of £1,684.
- Additional-rate taxpayers will see their numbers more than double, facing an average bill of £5,821.
- Additional-rate taxpayers, though only 15% of those taxed, will bear nearly half the total tax burden.
- Tax-free options like ISAs and ensuring idle cash earns interest are suggested to reduce exposure.
- Savers can shelter up to £20,000 annually in a cash ISA, with tax-free interest.