Published On: Fri, Aug 19th, 2022

Savings warning as you may be ‘penalised’ by ‘additional tax burden’ – how to avoid it | Personal Finance | Finance

Mr Davies continued: “PSAs, like all systems, have drawbacks, one of which is that the rate has not changed in six years. 

“As the country faces economic pressure, interest rates continue to rise, which is great news, but an increasing number of people will face an additional tax burden as they reach tax allowance thresholds. 

“This is especially frustrating because saving should be encouraged as a healthy part of a person’s financial portfolio and thus be tax-free.

“When the cost-of-living crisis is taken into account, saving is no longer an option; it is a necessity, and savers should not be penalised but rather rewarded for wanting to build a safety net.”

But the expert stated it does not have to be all doom and gloom, as savers have other options for maximising savings.

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