Chancellor has OAP savings in her crosshairs

PENSIONERS are being urged to fight back against the Treasury's tax raid on savings, as they are the ones most likely to be caught out.

- By Harvey Jones

More than a million now face paying income tax on interest they earned from savings accounts this year, around 44% of the total number affected, AJ Bell figures show.

Several factors are driving this trend. First, the personal savings allowance (PSA), has been frozen since launch in 2016.

The PSA allows basic rate taxpayers to earn £1,000 in savings interest rate of tax, falling to £500 for higher rate taxpayers. Additional rate taxpayers get nothing.

With income tax thresholds frozen until at least 2028, more savers are being pushed into a higher tax bracket, and seeing their PSA shrink as a result, or disappear altogether.