The number of savers that face paying £5,000 or more in income tax on their savings interest is set to rise to 144,000 this financial year, according to Paragon Bank.
A Freedom of Information request by the bank revealed that HM Revenue & Customs is forecasting this number of people will pay a minimum of £5,000 in the 2026/27 tax year, an increase of 173% in just four years.
The figures show that 52,700 individuals had a tax liability of more than £5,000 in savings income in the 2022/23 tax year. That more than doubled to 117,000 in 2023/24, before rising again to 133,000 in 2024/25 and 137,000 in 2025/26.
Furthermore, there are 1.1 million instant access adult non-ISA savings accounts holding balances of 100,000 or more with a combined value of over £260.7 billion. Paragon Bank said some of these balances are likely to be generating hundreds, if not thousands, of pounds in tax as they sit outside a tax-free wrapper.
Andrew Wright, head of savings at Paragon Bank, said: “These figures show that tax on savings is no longer an issue affecting just a small number of people. As balances have grown and rates have remained relatively high, far more savers are now finding themselves with substantial tax bills on their interest.
“With CACI data showing 1.1 million non-ISA savings accounts hold more than £100,000, it is clear there are a lot of people with larger balances who may need to think carefully about how their money is structured. Reviewing your savings regularly, checking the rate you are earning, and making use of tax-efficient options where appropriate can help ensure more of your return stays in your pocket.”
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