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Warning for savers as 300,000 more people set to pay tax on their savings, data shows
UNITED KINGDOM, AUG 6 – Rising interest rates and frozen tax thresholds have pushed 2.64 million savers into paying tax on savings interest, with the average bill around £2,300, data from AJ Bell shows.
- HMRC plans to tax 2.64 million people on their savings in the 2025/26 tax year, up sharply from 647,000 in 2021/22.
- This rise follows sharply increased interest rates without any policy change, causing a so-called 'tax trap' affecting more basic-rate taxpayers.
- Laura Suter of AJ Bell emphasizes that savings in ISAs remain tax-exempt and urges use of tax wrappers to protect against unexpected tax bills.
- HMRC expects to collect over £6 billion from savings tax while adjusting tax codes to collect directly from workers' pay, as Suter notes, "it's tax by stealth."
- Since April 2021, income tax thresholds have remained unchanged, and with the additional rate threshold lowered to £125,140 in 2023, an increasing number of savers are encountering higher effective tax rates and unexpected tax burdens.
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Total News Sources13
Leaning Left0Leaning Right5Center4Last UpdatedBias Distribution56% Right
Bias Distribution
- 56% of the sources lean Right
56% Right
C 44%
R 56%
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