‘Punishing’ Autumn Budget tax trap set to deal further blow to HENRYs

Thousands of UK workers are set to face an effective 64 per cent tax rate on their cash savings under a fresh tax raid launched by John Healey in his maiden Budget. The Chancellor confirmed he will hike taxes on savings by a further two per cent in April 2027, taking the rate to 44 per cent and 49 per cent for higher and additional rate taxpayers respectively. He also maintained the frozen tax thresholds implemented by his predecessor Rachel Reeves, including the longstanding personal allowance taper. If a worker’s income exceeds £100,000 the tax-free personal allowance is reduced by £1 for every £2 earned over the limit. For employees paying 40 per cent income tax on their salary, this clawback adds a further 20p of tax for every £1 of interest received. Brits caught in the taper pay an effective 60 per cent marginal rate on savings interest above their allowance, but the incoming tax hike will see this penalty rise to 64 per cent. Tax trap paradox For Britain’s hig