PM blasted for 'dream shattering thrift tax'

COST-OF-LIVING CRISIS

- David Williamson

RISHI SUNAK has been accused of "shattering dreams" by hitting savers with a "thrift tax" that will boost Treasury coffers by billions.

It will put the amount going to the Chancellor on course to multiply fivefold since the start of the decade.

People who have put aside savings are expected to pay out £7.6billion as a result of frozen thresholds and the increase in interest rates.

Tax on savings interest raised just £1.4billion in 2020-21.

But more than 1.2 million people are now expected to pay tax for the first time on money they have put away.

Basic rate taxpayers can only earn up to £1,000 in interest before having to pay tax. Higher earners have a limit of just £500.

This means homeowners who face forking out hundreds more each month in mortgage payments may also be hit with an unexpected tax bill on their savings.

John O'Connell, chief executive of the Taxpayers' Alliance, urged the Government to find ways of giving people "breathing room".

He said: "Savers are receiving a raw deal with inflation eating away at their hard-earned cash.