This figure is up from £1.2bn the previous year as the freeze on the personal savings allowance and rising interest rates has triggered tax charges. However, savers can still avoid paying tax by saving up to £20,000 a year in ISA accounts which are tax free although interest rates tend to be significantly lower than other types of savings accounts.

The personal savings allowance currently stands at £1,000 and £500 for basic rate and higher rate taxpayers respectively. Additional rate taxpayers get no tax break, meaning those with income over £125,140 now pay 45% tax on any cash interest outside an ISA.

Almost 1.8 million UK savers paid tax on interest earned from banks and building societies in 2022-23, showed data obtained by investment platform AJ Bell. Figures obtained following a freedom of information (FOI) request to HMRC revealed that, in the tax year ended this April, the number of savers caught by a tax bill rocketed 82% to 1.77m from 972,000 the previous year.