Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential merits of increasing the personal savings allowance for basic rate taxpayers.

The Personal Savings Allowance (PSA) allows basic rate taxpayers to receive up to £1,000 in savings income tax free. Higher rate taxpayers can receive up to £500 in savings income tax free.

Individuals can also save up to £20,000 into an Individual Savings Account (ISA) each year, where savings income is received tax free. In addition, the Starting Rate for Savings allows for tax free savings income of up to £5,000 for those with earned income below £17,570. Taken together, this means that around 85 per cent of people with savings income pay no tax on that income.

The Government keeps all aspects of the tax system under review.