Martin Lewis urges people on under £18,000 income to act for free £5,000

Martin Lewis says people who earn under £18,000 can find themselves £5,000 better off by taking advantage of a cash boost. The BBC Sounds podcast host discussed the Personal Savings Allowance on this week's ITV The Martin Lewis Money Show.

Addressing viewers, Mr Lewis, the consumer champion, explained: "Everybody is allowed to earn, or most people are allowed to earn, up to £12,570 a year without paying tax on any income, whether it’s from earnings or savings interest or whatever, so that’s your first amount."

He continued, saying: "If you earn from earned income less than that, as well as your £1,000 Personal Savings Allowance, there is a £5,000 starting savings allowance, which means you can earn £5,000 of savings interest on top, tax free."

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Mr Lewis, who is the founder of Money Saving Expert, went on to say during his explanation of the cash boost this week: "If you earn above £12,570, for every £1 above that you go, you lose £1 from your starting savings allowance.

"So let’s say you earned £2,500 above the £12,570 from earned income coming in, then your starting savings allowance would lose £2,500 so it would then be worth, £2,500." Mr Lewis continued his example, telling those viewing at home: "So you can earn £2,500 on starting savings tax-free and £1,000 from your Personal Savings Allowance, so an extra £3,500 of savings tax-free."

The MSE founder went on, and explained in a brief summary at the end of the segment: "Really complicated to explain, in a nutshell if you earn less than about £18,000 you may be able to earn more interest tax-free than anybody else.

"As simple as that." Mr Lewis' show is availavle to watch via ITV X on demand and catch up after it airs each and every Tuesday, from 8pm, for an hour until 9pm.