Since 2016, most savers have been able to grow their money without paying tax because the personal savings allowance (PSA) lets you earn interest on savings without paying tax on the interest earned. 

Now, rising interest rates means that savers are at risk of interest earned exceeding the tax free allowance.

The allowance varies depending on your income and in the current tax year basic rate taxpayers have an allowance of £1,000 and higher rate taxpayers £500, before having to pay tax on any interest above the allowance.

A basic rate taxpayer with savings in excess of £40,000 (£20,000 for a higher rate taxpayer) could soon be looking at a tax liability on the interest on some of these savings unless they are invested in tax free accounts, such as ISAs, Child Trust Funds and Tax Exempt Savings Plans. Healthy Investment’s Ethical ISA is just one of those tax free accounts worth considering that does not count towards your allowance. It benefits from the ethical investment strategy followed by the Society and to encourage tax efficient savings, all new ISA investors or those who transfer an ISA to the Society from another provider will qualify for a one time cash back incentive.

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