Savers and Landlords Face Four Points More From April 2027
Wednesday’s Budget added two percentage points to the tax rates on savings interest and property income, on top of two already announced by the previous chancellor. From April 2027 the rates become 24% for basic-rate taxpayers, 44% for higher-rate and 49% for the additional rate. The plan to cut the cash ISA limit was dropped.
This was the surprise of the Budget and it is a four-point increase arriving in two instalments, which is why it has taken some days to register. Set against ordinary income tax rates of 20, 40 and 45%, savers and landlords will pay four points more on this income than on earnings. One distinction is worth holding: the savings rates apply across the United Kingdom, while for individuals the property rates apply to England, Wales and Northern Ireland, with Scotland and Wales able to set property rates under their own powers. The official note also supplies the proportion: about 12% of taxpayers pay an average of £113 a year more on savings, and about 5% of taxpayers £225 more on property. And it gives the threshold that matters most — a basic-rate taxpayer using the starting rate and the personal savings allowance in full “would need over £150,000 in savings, held outside an ISA, paying 4%, to start paying tax on interest”. Those aged 55 and over make up 63% of those affected. The cash ISA limit stays at £20,000.