Martin Lewis issues urgent message to anyone with under £20,000 in savings

Martin Lewis has issued an urgent update to people over HMRC tax - saying it's unlikely you need to pay anything if you have under £20,000 in savings. The ITV and BBC star spoke out to reassure people via a new briefing on YouTube.

Mr Lewis' new video briefing explores if you need to pay tax on savings, and how you pay it. Mr Lewis, the 52-year-old star, went on to explain the schemes the state encourages you to use, to reduce it, amid the Cost of Living crisis.

Mr Lewis said: "Do you actually pay tax on savings? You don't pay tax on the amount of savings you have - but you are eligible to pay tax on the interest you accrue each year. You will probably have a Personal Savings Allowance, which is a special amount you can earn each year which isn't taxed.

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"People earning £12k to £50,000 a year, your PSA is £1,000. You can earn £1,000 of interest and you do NOT have to pay tax on it. So let us do a little bit of maths. The average rate at the minute is five per cent - so you'll need to have about £20,000 to accrue £1,000 in interest."

"If you have less than £20k in savings, it is UNLIKELY you need to pay tax," he said. "What a fantastic and helpful video Martin. You really are a star when it comes to explaning often complex subjects so that people can understand. Thank you!" a fan replied.

"If you have to pay tax on savings we should called it theft," another sniped. Taking to Twitter to promote the video, Mr Lewis said: "Will you pay tax on savings? If you need to how do you pay the tax? And the schemes the state encourages you to use, to reduce it. My new mini video briefing…"