New figures reveal that the number of savers expected to pay at least £5,000 in income tax on their savings interest has surged to 144,000 this year, according to a Freedom of Information request by Paragon Bank.
Sharp Rise in Tax Liabilities
The FoI response from HMRC shows that this figure represents a 173% increase over four years. In the 2022-23 tax year, just 52,700 people had a tax liability exceeding £5,000 on savings income. That number more than doubled to 117,000 in 2023-24, rose to 133,000 in 2024-25, and climbed again to 137,000 in 2025-26, with 144,000 projected for 2026-27.
Large Balances Outside ISAs
Further analysis by CACI data indicates there are 1.1 million Instant Access adult non-ISA savings accounts holding balances of £100,000 or more, with a combined value exceeding £260.7 billion. Paragon Bank warns that many of these accounts are generating hundreds or even thousands of pounds in tax because they are not sheltered in a tax-free wrapper like an ISA.
Andrew Wright, head of savings at Paragon Bank, commented: "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."
Advice for Savers
Wright added: "With CACI data showing 1.1 million non-ISA savings accounts hold more than £100,000, it is clear there are a lot of people with larger balances who may need to think carefully about how their money is structured. Reviewing your savings regularly, checking the rate you are earning, and making use of tax-efficient options where appropriate can help ensure more of your return stays in your pocket."
The data highlights how tax is becoming a growing issue for savers with larger balances, particularly as many people hold substantial sums in cash and seek to benefit from competitive interest rates.
