HMRC is sending £5,000 demand letters to 144,000 people with savings, as more savers are dragged into tax bills. In 2026-27, 144,000 individuals are expected to pay £5,000 or more in tax on their savings interest, according to data obtained by The Telegraph via a Freedom of Information request.
The figure has soared from 52,700 in 2022-23. HM Treasury statistics show that over 2.7 million savers are expected to pay tax on their savings income in 2026-27, up from 2.2 million in 2023-24.
Andrew Wright, of Paragon Bank, which obtained the statistics, issued a warning for people with savings pots: “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.”
Sarah Coles, of stockbroker AJ Bell, commented ahead of the Labour Party government's cash ISA changes: “It’s a bitter blow for savers that the cash Isa allowance is being cut. It means that those with large savings balances and committed savers putting serious sums away will pay a horrible tax price for trying to do the right thing.”
A Treasury spokesman said: “We are reforming the cash Isa to encourage more people to invest in stocks and shares – which have historically performed better than cash savings – and we have retained the generous £20,000 tax free limit. These changes will make people better off and will not require anyone to move existing savings from their cash Isa. The vast majority of savers will continue to pay no tax on their savings and the Treasury and HMRC are working at pace with industry on the detailed rules and will update on next steps in due course.”
