Is the Personal Savings Allowance Increasing in 2017/18?

The personal savings allowance was introduced in April 2016 and it meant that 95% of people no longer had to pay any tax on their savings.

Anyone who was in the 20% or the 40% tax brackets was entitled to a personal allowance of either £1000 or £500 respectively. Those in the highest tax bracket were not entitled to any personal tax allowance.

The figures given are the amount of interest that savers could earn before they would have to pay any tax on that interest. The figures were set for the initial tax year of the allowance which was 2016/17.

But if you are looking to see if the personal savings allowance is increasing for the new tax year 2017/18 then the answer is no, the allowances will remain at the figures of £1,000 for basic rate tax payers and £500 for higher rate tax payers.

With interest rates as low as they currently are this means that savers would need to have a significant amount of savings before they actually need to pay any tax on the income received from those savings.

In addition to the personal savings allowance there is also the £,5000 dividend allowance which means that savers will not have to pay any interest on the first £5,000 of dividend income that they receive.