From April 2027, savers in the basic rate tax band will pay 22% in savings income tax, up from the current 20%. Higher and additional rate taxpayers will pay 42% and 47% respectively.

2.64 million people already are expected to be hit with tax on their savings this year. The new tax rates are expected to cost an additional £100 for someone with £5,000 of savings interest above their personal savings allowance.