CONFIRMED: Healey reverses cuts to cash ISA allowances

SnowMan

In the budget document

6.247 Changes to tax on savings income – The government is increasing all the rates of income tax applied to savings income by 2 percentage points. The savings basic rate will be 24%, the savings higher rate will be 44%, and the savings additional rate will be 49%. These rates will apply across the UK. This will be legislated for in Finance Bill 2026-27 and take effect from 6 April 2027.

intalex

Sneaky to uplift by a further 2%…

janusd

https://forums.moneysavingexpert.com/discussion/comment/82184204#Comment_82184204

Changes to tax on savings income – The government is increasing all the rates of income tax applied to savings income by 2 percentage points. The savings basic rate will be 24%, the savings higher rate will be 44%, and the savings additional rate will be 49%. These rates will apply across the UK. This will be legislated for in Finance Bill 2026-27 and take effect from 6 April 2027.

Budget 2026 (HTML) - GOV.UK

Swipe

I've never been more thankful for the £5000 starting savings rate. Why is no one else reporting this savings hike?

jak22

A 10% rise in tax on interest was bad enough - interest on savings possibly from earnings on which income tax had already been paid, and for which interest goes some way to mitigate the effect of inflation - but a 20% rise in the rate in one go - amazing there's no mention beyond that Telegraph article. An extra 4% on each £2500 of taxable interest equals the £100 that's the headline in some places.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82184228#Comment_82184228

No doubt there'll be plenty of commentary to follow, but it's not unusual to express such changes in terms of percentage points, i.e. 2 or 4, rather than as a percentage of the original amount, i.e. 10 or 20 in your representation.

Cobbler_tone

https://forums.moneysavingexpert.com/discussion/comment/82184216#Comment_82184216

More reason to leave unneeded funds in tax wrappers, or withdraw them efficiently. If someone has enough money to fill an ISA every year, some will have £50k in Premium Bonds and then the rest stuck in bank accounts, they can afford to pay a bit more tax before they are worried about the price of gherkins. It always comes back to the frozen tax bands which are biting the vast, vast majority.

TBF though you have to think outside of your own bubble and there will be people saving into bank accounts for various reasons. Hopefully softened a little by reinstating the cash ISA limit.

4justice2

Martin Lewis has picked up on it on his Facebook page, so will presumably cover it in his budget ITV show. But you're right, I'm amazed very few commentators have picked up on it.

slinger2

It's so easy to go over £1,000 PSA limit. In 26/27: £750 on my £10k members thing with the Nationwide and £700+ on a couple of Regular Savers with the Monmouthshire and I'm well over the limit.

Tax-free options (for those of us maxed out with our ISAs) looking more attractive. Pleased I've gone into gilts recently. Also bought some CSH2 today to use up some of my CGT allowance.

jimjames

https://forums.moneysavingexpert.com/discussion/comment/82184214#Comment_82184214

But will affect few people when you can get £20k into ISAs every year alongside £1000 (or £500) savings allowance as well