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Savings Interest Tax Calculator

Find out how much tax you owe on savings interest in 2026/27, after the Personal Savings Allowance and starting rate band.

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GBP
GBP
2026/27: Personal Savings Allowance — basic-rate taxpayers £1,000, higher-rate £500, additional-rate £0. Starting rate for savings: 0% on up to £5,000 of savings if non-savings income is below £17,570 (PA + £5,000). Savings inside an ISA are always tax-free. Interest from NS&I Premium Bond prizes is also tax-free.

Tax on Savings Interest

Income tax on savings interest
£0

How savings interest is taxed

Savings interest is taxed as income, but several allowances can reduce or eliminate the liability. The Personal Savings Allowance (PSA) lets basic-rate taxpayers earn £1,000 of interest tax-free, and higher-rate taxpayers earn £500 tax-free. Additional-rate taxpayers (income above £125,140) have no PSA.

There is also a starting rate band of up to £5,000 at 0% for savings, available if your non-savings income is below £17,570 (the personal allowance plus the starting rate band). This is particularly valuable for low earners, retirees, or those who have taken career breaks.

Interest inside an ISA is completely tax-free and doesn't count against any allowance. With ISA allowances of £20,000 per year, most savers can shelter their interest entirely from tax. From April 2027, the ISA cash limit for under-65s drops to £12,000, so maximising cash ISA balances in 2026/27 may be advantageous.

FAQ

Do I need to declare savings interest to HMRC?
If your total savings interest exceeds your PSA, HMRC usually adjusts your tax code to collect the tax — you may not need a Self Assessment return. However, if you're already filing Self Assessment, include all interest. Banks and building societies report interest directly to HMRC.
What is the starting rate for savings?
If your non-savings income is below £17,570, you may have a 0% starting rate band for savings of up to £5,000. The band reduces £1 for every £1 of non-savings income above £12,570. It's most relevant for low earners or people with small pensions below the personal allowance.
Is NS&I Premium Bond interest taxable?
No — prizes from NS&I Premium Bonds are tax-free and don't count toward the PSA. NS&I also offers ISA accounts and other tax-free products.
What about joint savings accounts?
Interest from a joint account is split equally between the holders by default. Each person uses their own PSA. This can be advantageous if one partner is a basic-rate taxpayer and the other is higher-rate.