Savings warning because you could be ‘penalized’ by an ‘additional tax burden’ – how to avoid it | Personal finance | Finance

Mr Davies continued: ‘PSAs, like all systems, have drawbacks, one of which is that the rate has not changed in six years.

“As the country faces economic pressures, interest rates continue to rise, which is great news, but a growing number of people will face an additional tax burden when they reach the thresholds. tax allowance.

“It’s particularly frustrating because savings should be encouraged as a healthy part of a person’s financial portfolio and therefore tax-free.

“When the cost of living crisis is factored in, saving is no longer an option; it is a necessity, and savers should not be penalized but rather rewarded for wanting to build up a safety net.

But the expert said it doesn’t have to be all catastrophic because savers have other options to maximize their savings.

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