UK Consumers Are Reportedly Expecting to Save More But May Not Be Aware of Applicable Taxes

UK consumers are expecting to save more this year yet are unaware that the interest earned on their savings could result in being eligible to pay tax, according to an update from NatWest.

Almost a third (31%) of savers are “expecting to save more and almost half (44%) expect to save the same.” However, according to the latest survey by NatWest, more than “one in three (36%) do not know they may be eligible to pay tax on the interest earned on their savings.”

The new tax year started on 6 April. Consumers can “deposit up to £20k per tax year into an ISA without having to pay tax on the interest. It is also possible to transfer balances from an existing ISA account.”

Generation Z, those aged 18 to 24, “are least aware that they might be liable to pay tax on the interest they earn. Savers aged 65 and over are most likely to know they may be eligible to pay tax on their savings interest, with 86% aware, double the proportion of young people (43%).”

Older savers often have larger balances and “are the demographic most likely to have £40,000 or more in their account.”

Almost seven in ten (69%) savers expect “to earn interest on their savings this year and could be eligible to pay tax on the interest they earn.”

In the year ahead one in three (31%) are “planning to save more, meaning this number could grow further in the year ahead.”

To encourage savers to make “the most of their allowance, NatWest is offering 4.6% interest on a one-year fixed rate ISA.”

Lewis Broadie, NatWest Savings Expert said:

“Whatever your savings goals, let’s get saving. Whether you’re looking to save for something special or building a rainy-day fund, start the tax year strong and make the most of your tax-free ISA allowance to help you achieve your savings goals.”

NatWest offers a range of savings tools “to help younger people build a savings habit and balance.”

Round Ups enables customers “to round up a transaction to the nearest pound and save the extra.”

To help with developing a savings habit NatWest also “offers a Digital Regular Saver account with a rate of 6%.”

Customers may also be “eligible for a Personal Savings Allowance of £500 or £1,000 depending on their level of income.”

Later this year NatWest is launching “a Savings Index with in-depth information on savings habits and the barriers to saving.”

The survey was carried out by Yonder Consulting in the week “beginning 18 March 2024 and questioned a nationally representative sample of 2000 people across the UK.”

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