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Millions will see their PSA halved by 2028-29

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
08/07/2025

Millions will see their PSA halved by 2028-29

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“The OBR (Office for Budget Responsibility) has released its latest fiscal risks and sustainability report today. It is startling to see that 3.5 million consumers are going to be pulled into the higher-rate tax band of 40% by 2028-29. The fiscal drag is prevalent, and these latest statistics should be a stark warning for consumers.

“Savers are going to be in dismay of the fiscal drag, as any basic-rate taxpayer who moves up to the higher-rate tax bracket at 40% will see their Personal Savings Allowance (PSA) halved, from £1,000 worth of savings interest tax-free each year to just £500. Savers need to take advantage of their ISA allowance and protect their hard-earned cash from tax. The debate on whether the yearly cash ISA allowance should be cut is ongoing, so savers will no doubt want to maximise their deposits in the meantime.”

To quote directly from the OBR: “The changes to personal tax thresholds are expected to bring 4.2 million additional taxpayers into income tax, and shift 3.5 million taxpayers into the higher-rate band, and 0.6 million into the additional-rate band, by 2028-29.”

 

Millions will see their PSA halved by 2028-29

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“The OBR (Office for Budget Responsibility) has released its latest fiscal risks and sustainability report today. It is startling to see that 3.5 million consumers are going to be pulled into the higher-rate tax band of 40% by 2028-29. The fiscal drag is prevalent, and these latest statistics should be a stark warning for consumers.

“Savers are going to be in dismay of the fiscal drag, as any basic-rate taxpayer who moves up to the higher-rate tax bracket at 40% will see their Personal Savings Allowance (PSA) halved, from £1,000 worth of savings interest tax-free each year to just £500. Savers need to take advantage of their ISA allowance and protect their hard-earned cash from tax. The debate on whether the yearly cash ISA allowance should be cut is ongoing, so savers will no doubt want to maximise their deposits in the meantime.”

To quote directly from the OBR: “The changes to personal tax thresholds are expected to bring 4.2 million additional taxpayers into income tax, and shift 3.5 million taxpayers into the higher-rate band, and 0.6 million into the additional-rate band, by 2028-29.”

 

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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Adam French Head of News & Communications
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Press & PR Executive