Have I got this savings lark wrong in terms of tax benefits?

Band7

You seem to be sold now on the multiple recommendation to pay extra NI for the £20/week - but just in case you aren't, read this: https://www.moneysavingexpert.com/news/2022/10/martin-lewis--how-to-boost-your-state-pension-if-you-re-aged-bet/

Iiyama said:

 

The tax issue on savings remains a concern that I need to address.  As I don't appear to have paid tax on my savings for 3 years I need to address this to save any unintended tax situation arising. Is this best done with an accountant?

Savings providers report the interest they paid you to the HMRC. HMRC will normally adjust your tax code if tax on the interest becomes due. The trouble is that  

1. it's significantly delayed, as the reporting doesn't complete for several months after the end of the tax year in which you earned the interest
   
   
2. HMRC will assume that you will get as much interest this year as you had in the last reported year, unless you tell them differently. 

You can check your tax code online in your Personal Tax  Account. If your income is incorrect, you can amend it in the PTA or on the phone with HMRC, or in a Self Assessment. Tax on savings is simple to administer. You shouldn't need an Accountant for this but it helps if you keep detailed records of your accounts and the interest payments you received.

Putting savings and investments into ISAs is a good idea to avoid tax on your gains.

Note that each of you can also still make tax-efficient pension contributions of £2,880 a year. Perhaps check this out on the Pension board