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A recent account from a North Tyneside saver illustrates a growing issue: even modest interest earnings can breach frozen ISA‑free allowances.
The individual accrued roughly £80,000 in cash savings earning circa 4 % interest, only to hit a £1,080 tax charge after exceeding the £500 tax‑free savings allowance for higher‑rate taxpayers.
With thresholds frozen until 2028 and interest rates rising, more middle‑income savers are unexpectedly taxed.
Experts recommend maximising ISA contributions, utilising spousal allowances, and carefully timing deposits or withdrawals to minimise tax liabilities.




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