Martin Lewis Savings Accounts Warning: New Best Deals, Tax Traps, and Why Millions Are Rushing to ISAs in 2025
Money-saving guru Martin Lewis has once again drawn national attention to the growing importance of choosing the right savings account. With interest rates at levels not seen in over a decade, millions of savers are looking for the best way to protect and grow their money. However, Lewis warns that higher returns may also bring tax surprises, making it essential to understand how different accounts—from easy-access to ISAs—fit into your financial plan.
Martin Lewis Savings Accounts Advice: Interest Could Mean Bigger Tax Bills
Martin Lewis has stressed that anyone with around £10,000 or more in savings must be alert to how much interest they are earning. The concern is not the amount saved but the taxable interest, which could easily push savers above the Personal Savings Allowance. Once this threshold is breached, HMRC may tax a portion of the returns.
This means savers enjoying high returns from new account deals may find themselves facing tax for the first time, particularly as more households move from low-rate to competitive savings options.
Best Current Savings Accounts in the UK
According to the latest updates, a wide variety of martin lewis savings accounts recommendations are available for different saver needs.
Easy-Access Accounts
These accounts are popular for flexibility, letting savers withdraw funds at any time.
| Bank/Provider | Rate (Approx.) | Key Feature |
|---|---|---|
| Chase | 4.75% | Market-leading easy access |
| Cahoot (Santander) | 4.40% | Competitive and reliable |
Fixed-Term Savings
Fixed-term products are designed for savers who can lock away funds for set periods.
| Bank/Provider | Term Length | Rate (Approx.) |
|---|---|---|
| Chetwood Bank | 6 months | 4.45% |
| Tandem Bank | 1 year | 4.45% |
| JN Bank | 2 years | Competitive multi-year rate |
Notice Accounts
These require advance notice before withdrawals but often provide better rates.
| Bank/Provider | Notice Period | Rate (Approx.) |
|---|---|---|
| Oxbury Bank | 120 days | 4.54% |
Regular Savings Accounts: High Interest with Limits
For disciplined savers, regular savings accounts remain a standout choice. Martin Lewis highlights that some of these can pay up to 7.5% interest, although monthly deposits are capped and withdrawals can be restricted.
Top current options include:
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Principality Building Society: 7.5% for six months, fixed.
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Zopa: 7.1% variable, strong for existing customers.
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First Direct: 7.0% fixed for regular monthly deposits.
These accounts suit those who can commit to adding money steadily rather than holding large balances from the start.
Why Cash ISAs Are Back in Focus
Cash ISAs have surged in popularity as interest on savings climbs and tax thresholds remain tight. In the 2023–24 tax year, a record £103 billion flowed into ISAs, with £70 billion specifically going into cash ISAs.
For many, cash ISAs are a smart way to avoid tax on interest, as all ISA interest is exempt regardless of how much is earned. With rates on cash ISAs increasingly competitive, Martin Lewis points out that they may offer vital protection for those close to breaching their savings allowance.
Key Actions Martin Lewis Recommends for Savers
To make the most of today’s market, Lewis suggests:
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Check your rates often: Some top deals are introductory or time-limited.
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Understand restrictions: High-rate accounts may come with limited withdrawals or notice periods.
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Consider cash ISAs: Especially if interest is likely to exceed your tax-free allowance.
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Diversify savings: Keep emergency funds in easy-access accounts, while locking surplus money in fixed or regular savers.
Are Today’s High Savings Rates Sustainable?
Although the current environment is favourable for savers, experts warn that rates may not last. The Bank of England has already begun reducing interest rates from recent highs, which historically leads to savings rates dropping as well. At the same time, inflation continues to erode real returns, even on accounts paying more than 4%.
This combination means that while savers are enjoying strong returns now, the window to lock in top rates may be closing.
