Because you’re taxed on savings interest in the tax year you can access it, if you opt for a fixed-rate savings account longer than a year where the interest is paid at maturity, all the interest is counted towards the final year’s PSA.
Then there’s the different type of account: according to Money Saving Expert (MSE), those on the basic rate would need around £20,000 placed in a top easy-access savings account to exceed the allowance at current rates, with the figure for higher rate taxpayers sitting just over £10,000.
Brits with £3,500 or more in savings risk imminent HMRC tax bill UK savers have been urged to check HMRC rules, as a ‘significant’ portion will soon face tax bills due to rising interest rates.
Savings in tax-free accounts like Individual Savings Accounts (ISAs) and some National Savings and Investments accounts do not count towards your allowance.
Paragon Bank recently revealed 2.4 million fixed term non-ISA savings accounts are set to mature in the next three months, up to 887,000 of which have generated enough interest to incur a tax payment.
