Overview
- Yorkshire Building Society estimates savers will have paid more than £28 billion in tax on interest by the end of 2025–26 since the allowance began in 2016.
- The allowance remains £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers, with none for additional-rate payers.
- With typical savings rates near 3%, a basic-rate payer now breaches the limit with roughly £33,000 saved, or about £16,000 for a higher-rate payer, versus about £100,000 in 2016.
- HMRC data show the number of people paying tax on savings more than doubled in three years to 2.79 million, driven by higher rates and fiscal drag; 2.1 million more people now pay higher-rate tax than in 2016, with the OBR projecting a further 4.4 million by 2030.
- From April 2027, tax on interest above the allowance rises to 22%, 42% and 47% for basic, higher and additional rates, and the Cash ISA limit for under-65s falls from £20,000 to £12,000.