Savers given £5,000 warning as they could receive surprise tax bill

manchestereveningnews.co.uk:

Savers nationwide could be hit with a surprise tax bill depending on how much they've put away over the years. A number of banks have been offering attractive savings rates for both new and existing customers which may be even more tempting for some following the recent drop in the Bank of England's (BoE) base rate to 4.50%.

However, savvy-savers should take some time to calculate how much they will actually earn on interest in the long-run as they made end up losing a significant amount in tax to HM Revenue and Customs (HMRC).

According to official guidance, most people can earn interest on their savings and not pay any tax. However, if you earn enough interest, you will end up needing to pay tax.

The amount of tax you pay will depend on a number of things, including how much your past your Personal Allowance, your starting savings rate, and your Personal Savings Allowance.