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Millions of pensioners risk surprise HMRC bill as Personal Allowance hit by rise
Experts say frozen tax thresholds and higher interest rates are pushing more retirees and savers into tax, with some missing up to £1,500 in allowances.
- Millions of Britons face a "stealth tax" trap as the tax year ends on April 5, with the personal tax allowance frozen at £12,570 pushing more people into paying unexpected tax.
- Tim Grimsditch, Managing Director at Unbiased, said the state pension rise is a "double-edged sword" because the frozen allowance consumes the tax-free buffer, triggering unexpected HMRC tax liabilities for retirees.
- Experts recommend checking ISA limits, which allow saving up to £20,000 annually, to help savers avoid missing out on up to £1,500 in tax-free allowances before the deadline.
- Rising interest rates mean more savers now exceed the personal savings allowance; £20,000 saved at 4.58 percent earns around £916 annually, exceeding the £500 allowance for higher rate taxpayers.
- Tim Grimsditch advised those unsure of their position to "seek help from a professional financial adviser who can help clarify your position, reduce uncertainty, and plan with greater confidence" before April 5.
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