Thanks to the personal savings allowance, all basic rate taxpayers can now earn up to £1,000 a year tax-free on any interest from savings and current accounts. Higher rate taxpayers can earn up to £500, while additional rate taxpayers have £0 personal savings allowance.
This means that if you’re a basic or higher rate taxpayer, you might feel it’s not worth investing in a tax-efficient ISA. However, bear in mind that while interest rates are rising, those that have a lot in savings could get closer to reaching their personal savings allowance limit – in which case, saving in an ISA could make good financial sense.