Overview

• Since the Personal Savings Allowance was frozen in 2016, the number of savers facing tax on interest rose from 647,000 in 2021/22 to a projected 2.64 million in 2025/26.
• Chancellor Rachel Reeves has mandated that from April 2027 banks must collect and share customers’ National Insurance numbers with HMRC to improve tax matching.
• HMRC will be empowered to deduct any savings tax owed directly through PAYE adjustments for savers who exceed their allowances.
• The tax authority expects to raise over £6 billion in savings tax this year, while implementation of the data-sharing reforms is estimated to cost £35 million.
• Financial experts advise savers to use tax-efficient wrappers such as ISAs to shield interest income as more ordinary depositors enter the tax net.