Savers face higher tax rates from April 2027
UKPulse Money Desk
John Healey's budget has introduced new tax charges on savings and property income, with basic-rate taxpayers facing a 24% rate, higher-rate taxpayers facing 44%, and additional-rate taxpayers facing 49%. The changes come into effect on 6 April.
- The new tax rates will apply to savers across the UK from 6 April 2027
- Basic-rate taxpayers will face a 24% tax rate, higher-rate taxpayers will face 44%, and additional-rate taxpayers will face 49%
- Savers can use their Isa allowance and personal savings allowance to reduce their tax bill
Savers were both winners and losers in Wednesday's budget. In his first outing as chancellor, John Healey dropped a plan to cut the cash Isa limit for under-65s but surprised everyone with an extra tax charge on savings and property income.
Jason Hollands, managing director at wealth manager Evelyn Partners, describes the higher rates as a 'sting in the tail' for savers. However, he says there are practical steps savers can consider to mitigate this interest tax crunch, although the right approach will depend on their circumstances.
Why this matters: The changes could make it harder for savers to find accounts that beat inflation, and may require them to pay more in taxes.
What this means for you: You may need to review your savings strategy and consider using your Isa allowance or personal savings allowance to reduce your tax bill.