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Tax Year 2024

How ISAs and pensions can help you
save tax

How ISAs and pensions can help you
save tax

How ISAs and pensions can help you
save tax

Important information: This isn’t personal advice. Unlike the security offered by cash, the value of all investments and any income they produce can fall as well as rise, so you could get back less than you invest. UK tax rules can change and the benefits will depend on your individual circumstances. Money in a pension is not usually accessible until at least age 55 (57 from 2028). If you’re not sure whether an investment is right for your circumstances, please ask for advice.

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23/24 tax year unwrapped

The government is forecast to take a total of £950 billion in tax this tax year. At 36.9% of GDP, this is set to be the highest tax burden the UK has faced since just after the Second World War.

Tax is important. It pays for many services including schools, the NHS and things that help keep us safe. But there are generous tax allowances that you can make the most of, so that you’re not paying more than you have to.

Unwrapped money - held outside of an ISA or pension – could be subject to certain UK taxes. Last year, ISAs and pensions helped Brits save an estimated £23.6 billion in tax on their savings and investments.

We’ve crunched the numbers to help you make sense of it all.

The information on this page is correct as at 8 February 2024 and relates to the 2023/2024 tax year. If you’re a Scottish taxpayer, tax rates and bands are different. Tax rules can change and benefits depend on personal circumstances.

What taxes mean for savers

2.7 million – the estimated amount of people who’ll pay tax on savings interest in 2023/24. That’s enough people to fill Wembley stadium 30 times over and nearly a million more people than last year.

A few years ago, we had low interest rates. So, you’d have received a lot less interest on cash held in savings accounts.

As an example, an interest rate of 0.5% two years ago would have meant you’d have needed at least £200,000 in a savings account before you’d have reached the personal savings allowance for basic-rate taxpayers. Higher-rate taxpayers would’ve needed £100,000.

This year we’ve seen interest rates at least 10x higher than this. There’s more interest to tax. And the personal savings allowance hasn’t risen to match it.

You now need much less, with an interest rate of 5% you’d need £20,000 or £10,000 to be at risk of paying tax on savings interest. These figures assume the interest rate and account balance stay the same for the whole year.

Additional rate taxpayers don’t have a personal savings allowance and the cut to the additional rate threshold means more people will pay tax on all interest they earn.

A Cash ISA has therefore become much more valuable than it was two years ago.

What taxes mean for investors

Investors are expected to pay £17.6 billion in tax on dividends in 2023/24. And £16.5 billion in capital gains tax.

That combined is enough to buy everyone in the UK the latest iPad (£508).

The dividend allowance has been reduced since the 22/23 tax year when it was £2,000. This tax year it’s £1,000, half of the previous allowance, which means many earning dividends could pay more tax. And it’s due to fall further to £500 next tax year.

Capital gains tax will also catch many out. The allowance is lower this tax year than the last one. £6,000 instead of £12,300 the year before. It’ll be lower again next year, just £3,000.

So, there’s even fewer allowances available for investors if you hold investments outside of an ISA or pension.

What this means for taxpayers

Whether they’re investing, saving or neither, more people will likely be paying tax.

29.4 million are expected to be basic-rate taxpayers. That’s up 8% in three years.

5.6 million people are expected to be higher-rate taxpayers. That’s up nearly 41% in three years.

And there are expected to be 862,000 additional-rate income taxpayers, up 99% in three years.

The personal allowance and higher-rate thresholds have been frozen since April 2021, with the basic-rate threshold not increasing in line with inflation since April 2022 either. The additional-rate threshold was also lowered to £125,140 in April this tax year.

We’ve seen inflation since then, and wage increases for some to counteract this, forcing many into new tax brackets.

This change in tax bracket doesn’t just affect the tax you pay on your salary or wages. It can also impact the amount of tax you pay on savings, dividends and capital gains tax.

Helping you save tax

Here are some of the ways you could make the most of your generous ISA and pension allowances. The tax year ends on 5 April, so you still have plenty of time to open or top up the account that’s right for you.


Stocks and Shares ISA

  • Pay no UK income or capital gains tax on investments
  • Nothing to declare on a tax return
  • Choose from a wide array of investments including funds and shares or pick a ready-made investment
  • Make tax-free withdrawals when you need to, though investments should be held for at least five years
  • Offers more growth potential compared to a cash ISA but there are extra risks including losing money when investing.


  • Pay no UK tax on interest
  • Nothing to declare on a tax return
  • The UK’s only multi-bank Cash ISA. Split your savings across different partner banks in the same tax year all in one online cash ISA.
  • Access great rates from our range of partner banks
  • Pick and mix between fixed rates, easy and limited access rates
  • The future spending power of your cash will reduce if your savings rate is lower than the rate of inflation.

HL Self-Invested Personal Pension (SIPP)

  • Pay no UK income tax or capital gains on investments
  • Get up to 45% tax relief from the government
  • Pay in up to £60,000 per year (limit may reduce in some cases)
  • Choose from a wide array of investments or pick a ready-made pension plan
  • Take money out from age 55 (57 from 2028). Get up to 25% tax free when you come to retire and the rest taxed as income

Want a different account? Try our interactive account filter to compare the options.

If you choose to open more than one account, you’ll be able to see everything with a single set of log in details.

See all account options

Need more help with what steps to take?

If you’re looking for help with complex money matters, our financial advice team could help.

Book a call with our helpdesk to discuss the benefits you might see from taking advice and our charges. If you decide to go ahead they’ll book your appointment with a financial adviser. You’ll need to book a call back by 8 March to get advice before the end of the tax year.

Book a callback

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This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.

The HL Cash ISA is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised and regulated by the Financial Conduct Authority (firm reference number 915119). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money.

Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).