Martin Lewis has given a key savings rule for all couples – who are both married or in a civil partnership. The personal finance expert told couples they could save hundreds of pounds directly related to savings and investments.

Speaking on hi ITV money show live, Mr Lewis explained people could quite legally transfer funds between each other to utilise savings allowances. He said savers have a tax free allowance for interest – and how much that is depends on how much they earn.

He said: “Well, this is one of those specific, deliberate rules that is an advantage for married couples and people in civil partnerships. You can move money between you without any tax. I mean it’s been done to aid marriage in the tax. You want to move assets to maximize your tax free allowances and minimize the tax rates that you pay. With savings, you’ve got the Starting savings rates, that’s for people on low income but high savings interest. The Personal Savings Allowance, you all know what that is?

“The £1,000 you can earn each year without paying interest if you’re a basic-rate taxpayer, £500 as a higher-rate taxpayer. Let me do an example of what I’m talking about based on that. So here you go. We’ve got Val and Tine who are married. Val’s a 40% rate taxpayer. She’s got £1,500 a year of savings interest.

“Her Personal Savings Allowance is £500, so she has to pay tax on a 1,000 at 40%. That’s £400. Tine’s a 20% rate taxpayer. She’s got £500 a year of interest. She’s not using her tax-free allowance. She doesn’t pay tax. So, in a trusted relationship, if they move the savings, some of the savings from Val’s name into Tine’s name, this is what happens.

“Okay. Val’s now got £500 a year of savings interest. She’s got a £500 a year tax-free allowance. No tax. She was paying £400. Tine’s got £1,500 a year. She can earn £1,000 a year of interest tax-free. So she’s got £500 that’s taxable but she’s a 20% rate taxpayer, not a 40% rate taxpayer. So the tax is less. So she pays £100 tax. They’ve gone from a combined £400 tax on savings interest to a combined £100 tax on savings interest. Just by moving money between them.”

If someone was a higher rate taxpayer and in an account with around 4.5 per cent interest they would have to have around £11,500 savings to pay tax on the interest. A lower rate taxpayer could have around £23,000 in savings at that rate before paying tax on the interest.

Tax-free savings allowances in the UK allow you to earn interest on savings without paying income tax, with limits based on your tax band: £1,000 for basic-rate (20%) taxpayers – those who earn between £12,570 and £50,570 and £500 for higher-rate (40%) taxpayers earning more than £50,570.

Mr Lewis said the rules also apply to dividends. He said: “Now it doesn’t just apply to savings. If you’ve got dividends from shares you’ve got a £500 a year tax-free allowance. If you’ve got capital gains, you’ve got £3,000 a year. You’re selling your business, it’s in your name. You’re allowed to make £3,000 a year of gains on profits. Well, you could beforehand give half of it to your spouse and then you could both use your £3,000 each, moving money between you to maximize your tax allowances of the rule.

“And also, of course you can use your ISAs, your cash, your investment ISAs, to maximize that too. So putting money in the right place between you, all our lovely marrieds or newly marrieds or getting marrieds over there, is actually really an efficient way to use your cash. And it is deliberate. It is deliberate that you’re allowed to do that. It’s one of the benefits given to a married couple or civil partners.”