Overview
- HMRC expects 2.64 million savers to face tax on interest in 2025–26, an increase of over 120,000 from the prior year driven by higher rates and frozen allowances.
- Nottingham Building Society data reveals 3.35 million people will exceed their savings allowances this year, pushing expected revenue from savings tax above £6 billion.
- Income tax thresholds have been frozen since 2021 and personal savings allowances since 2016, intensifying fiscal drag on ordinary savers as inflation and interest rates climb.
- The government has delayed any decision on reviewing the £20,000 cash ISA limit following strong opposition, stressing the importance of tax-efficient vehicles for savers.
- HMRC’s automated systems fail to reconcile bank interest with taxpayer records in about one in five cases, prompting wider data access proposals and enforcement concerns.