How it works
Enter your total savings interest for the year and your income-tax band (basic, higher or additional). We apply the Personal Savings Allowance and your marginal rate in your browser.
In detail
Most people pay no tax on savings interest thanks to the Personal Savings Allowance (PSA) and the starting rate for savings. The PSA lets you earn a set amount of interest tax-free each year, and anything above it is taxed at your marginal rate.
2026/27 Personal Savings Allowance
| Band | Tax-free allowance | Rate above it |
|---|---|---|
| Basic-rate | £1,000 | 20% |
| Higher-rate | £500 | 40% |
| Additional-rate | £0 | 45% |
There is also a starting rate for savings of up to £5,000 taxed at 0%, available if your other taxable income is below £17,570. This calculator applies the PSA by band; it does not model the starting-rate interaction. Interest from ISAs remains completely tax-free. The authoritative source is GOV.UK — Tax on savings interest.
FAQ
How much savings interest is tax-free in 2026/27?
Basic-rate taxpayers get a £1,000 Personal Savings Allowance, higher-rate £500, and additional-rate taxpayers get none.
What rate is savings interest taxed at?
Any interest above your allowance is taxed at your marginal income-tax rate: 20%, 40% or 45%.
Are ISA savings taxed?
No. Interest earned inside an ISA is tax-free and does not use your Personal Savings Allowance.
What is the starting rate for savings?
Up to £5,000 of savings can be taxed at 0% if your other taxable income is below £17,570. This calculator focuses on the PSA.