The finance guru has warned that people who have £10,000 in savings could face losing money to tax, due to lucrative interest rates that are currently on the market.
Martin Lewis , the well-known money saving expert, has delivered a stark warning to Britons harbouring savings, indicating they could be slapped with a significant tax demand. Specifically spotlighting individuals with £10,000 put away, Lewis highlighted that they might find themselves owing cash to the taxman due to current interest rates offered by banks.
While this boost seemingly benefits savers, it also acts as a double-edged sword, increasing the number of people whose savings interest is susceptible to tax. As reported by Express.co.uk, Lewis detailed that a basic rate taxpayer in with £20,000 in savings may find themselves owing tax within a 12 months.
Luckily most people can earn up to £1,000 a year interest without needing to pay tax. He continued: “But you get a Personal Savings Allowance. What this means is a basic rate taxpayer can earn £1,000 a year of interest and you don’t pay tax on it. "So what does that mean in practice? So if you take that top five percent figure, as a basic rate taxpayer if you have over £20,000 in savings at five percent, you would earn more than a grand of interest so everything above that would be taxed."
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