This year, rising savings rates and frozen tax thresholds mean millions risk breaching the Personal Savings Allowance (PSA) and facing tax on their savings for the first time. The PSA allows basic-rate taxpayers to earn up to £1,000 in savings interest tax-free each year. As a result, 2.64 million people are expected to pay savings tax in 2025/26, up from only 647,000 in 2021/22*. One in 25 basic-rate taxpayers and one in eight higher-rate taxpayers will now be affected. The Treasury is set to collect more than £6 billion from savings interest this year - a fourfold jump in just five years.