Chancellor’s Savings Raid Could Hit Lower Earners Hardest
11th March 2026
Lower earners are bearing the brunt of frozen savings tax thresholds, sparking fears that the chancellor’s next raid will disproportionately affect poorer households.
The number of basic-rate taxpayers being taxed on their savings interest has risen 131 per cent since 2022 to a predicted 1.42 million in 2025-26, according to Paragon Bank. The number of higher-rate payers affected has risen 128 per cent to 883,000 while an extra 479,000 top earners paid additional-rate tax on their interest — a rise of 76 per cent.
And it is about to get worse because the rates of tax paid on that interest is set to go up from April 2027 under plans in Rachel Reeves’s November budget.