Sign the Petition to Suspend Income Tax on Savings Interest

Written by Karen Bryan

I support the Save Our Savers campaign for a suspension in income tax on interest on savings. Presently UK savers are being taxed on losses on their savings account.  Currently (August 2011), with many savings accounts offering interest of around 3% per annum and inflation (RPI) standing at 5% per annum, your savings are losing 2% in value over a year. As if that wasn’t bad enough, if your income is above the personal tax threshold and you are a basic rate taxpayer, you are paying 20% tax on that 3% interest. This means that you are not getting a real return on your savings, you only receive 2.4% interest net, so in fact your savings are losing 2.6% in spending power per year.

You can get some of the interest on your savings tax free with a current £5,640 Cash ISA limit per year. However, if you have built up savings over the years, you probably won’t be able to shield all your savings from tax this way.

Click here to sign the e-petition if you think the current situation is unfair and you think that there should be no income tax to pay on losses from your savings. Save our Savers also recommend that you write to your MP, telling them how this policy is affecting you personally.

In fact, I’d like to see the petition go further, as I don’t think I should be double taxed on income which I save.