A warning has been issued to those who have a joint savings account as they could risk having to pay tax on their savings.

It comes as more people are set to breach their personal savings allowance this year due to higher cash interest rates. According to data compiled by Shawbrook, in April, over six million savings accounts were set to earn enough interest to trigger a tax bill this year.

Under the current rules, the personal savings allowance for 20% basic rate taxpayers is £1,000. This means you can earn up to £1,000 worth of interest before having to pay tax. For higher 40% rate taxpayers, the allowance is £500. Additional rate taxpayers - so those with a salary higher than £125,140 - receive no tax break at all. These limits have not changed since they were introduced in 2016.

Although many people are aware of and keep track of their savings, Laura Suter, director of personal finance at AJ Bell warns that some savers could get caught in some "sneaky tax traps" without realising it. One of these traps is when you have a join savings account.

Laura noted that lots of people may have savings accounts in joint names, but they may not realise that this means the interest is split 50:50 between the two account holders. But if one of you is a higher taxpayer, then you would have to pay more tax on the savings than someone who is a basic rate taxpayer.

This means you need to be smart about whose name the account is in, as if the other half is a lower earner - it may make sense to have it entirely in their name. She explained: "It could mean you have taxable interest that you hadn’t realised. For example, a joint savings account that generates £1,000 interest each year would be split so that each partner has £500 interest to count towards their Personal Savings Allowance.

“If one half of a couple is a lower earner, and so in a lower tax bracket, it could make sense to move the savings into an account in their name, as any interest that’s taxable will be paid at a lower rate. For example, a higher-rate taxpayer who had £1,000 of taxable interest would pay £400 in tax on the money, while a basic-rate taxpayer would only pay £200 in tax.

“Even if both partners are in the same bracket, if one half hasn't exhausted their Personal Savings Allowance you could move savings into their name to maximise their tax-free amounts.”