She said: "More than two million people will face a tax bill on their savings interest this tax year, as rising interest rates and frozen tax thresholds have pushed more people into these tax bills.
Laura said: “Interest is taxed when it becomes accessible, so if your account pays at maturity, years’ worth of interest lands in one tax year, potentially pushing you over your personal savings allowance.
A £1,000 interest payout is split into £500 each, which would push a higher-rate taxpayer over their personal savings allowance if they have other cash savings interest.
A £50,000 salary plus £1,000 savings interest makes you a higher-rate taxpayer, cutting your personal savings allowance to £500 and leaving £500 of interest taxable at 40%.
More people have been pushed over their personal savings allowance due to huge improvements in savings rates over the past few years - but Laura Suter, director of personal finance at AJ Bell, has explained all the pitfalls to be aware of to protect more of your money from the taxman in the future.
