UK Savings Interest Tax Calculator (2026/27)
How much tax on savings interest you pay in 2026/27: your Personal Savings Allowance (£1,000, £500 or £0 by tax band), the £5,000 starting rate for savings, any unused Personal Allowance, and why cash ISA interest is tax-free. Results update instantly, with every step shown. No sign-up.
England, Wales and Northern Ireland Income Tax bands, standard Personal Allowance, no dividends. For a joint account enter your share (HMRC splits interest equally unless told otherwise).
- Savings interest (outside ISAs)£0
- Covered by Personal Allowance£0
- Starting rate for savings used£0
- Personal Savings Allowance used£0
- Interest taxed£0
- Interest kept after tax (incl. ISA)£0
Quick answer
With £35,000 of other income and £1,500 of savings interest outside ISAs, tax on the interest in 2026/27 is about £100: you're a basic rate taxpayer with a £1,000 Personal Savings Allowance. England, Wales and Northern Ireland bands. Rules from GOV.UK, checked 18 October 2026; they can change.
The same interest at different incomes
Your other income decides which allowances you get. Same interest as above.
| Other income | Taxpayer | Tax-free interest | Tax |
|---|
Tax-free allowances for savings interest
GOV.UK lists three allowances, given each tax year (6 April to 5 April), depending on your other income:
- Personal Allowance (£12,570). If it is not fully used by your wages, pension or other income, HMRC applies the rest to your savings interest.
- Starting rate for savings (up to £5,000). Available if your other taxable income, not including savings interest or dividends, is less than £17,570. Every £1 of other income above your Personal Allowance reduces it by £1.
- Personal Savings Allowance. Depends on your Income Tax band, worked out by adding all your interest to your other income:
| Income Tax band | Personal Savings Allowance | Rate on interest above your allowances (2026/27) |
|---|---|---|
| Basic rate | £1,000 | 20% |
| Higher rate | £500 | 40% |
| Additional rate | £0 | 45% |
GOV.UK: “You pay tax on any interest over your allowance at your usual rate of Income Tax.” The rates are the 2026 to 2027 bands on GOV.UK's Income Tax rates page (England, Wales and Northern Ireland). This calculator treats interest as sitting on top of your other income.
The GOV.UK examples, reproduced
- Starting rate: you earn £16,000 of wages and £200 interest. The Personal Allowance uses the first £12,570 of wages; the remaining £3,430 reduces the starting rate to £1,570 (£5,000 − £3,430), so there is no tax on the £200.
- Personal Savings Allowance: a basic rate taxpayer earns £1,300 of interest. The first £1,000 is not taxed; the remaining £300 is taxed at 20%: £60.
Both are checked by an automated test that runs before every update.
Cash ISAs
GOV.UK: you do not usually have to pay tax on interest earned in Individual Savings Accounts (ISAs) and some National Savings and Investments. Keeping savings in a cash ISA is the simplest way to stop interest being taxed once you're above your allowances.
How the tax is collected
- After 5 April, your bank or building society tells HMRC how much interest it paid you.
- If you're employed or get a pension, HMRC sends a tax calculation (usually between June and the following March) and usually collects the tax through your tax code.
- If you already file Self Assessment, report interest there. If your interest is more than £10,000, you need to file a Self Assessment tax return.
What this calculator does not cover
- Scottish Income Tax, dividends, and foreign savings or children's accounts (GOV.UK has different rules for these).
- Marriage Allowance, Blind Person's Allowance, and reliefs such as pension contributions that change adjusted net income.
The formula
- Starting rate — £5,000 − (other income − Personal Allowance), not below £0
- Personal Savings Allowance — £1,000 (basic), £500 (higher), £0 (additional), with interest added to income to find the band
- Tax — taxed interest at 20%, 40% or 45% depending on where it falls in the bands
See the formula with your own numbers
These update live from the calculator inputs above.
Frequently asked questions
How much savings interest can I earn tax-free in 2026/27?
It depends on your other income. You may have unused Personal Allowance (£12,570), the starting rate for savings (up to £5,000 if your other income is under £17,570) and the Personal Savings Allowance: £1,000 for basic rate, £500 for higher rate and £0 for additional rate taxpayers.
What is the starting rate for savings?
If your other taxable income (not savings interest or dividends) is less than £17,570, you can earn up to £5,000 of interest tax-free. Every £1 of other income above your Personal Allowance reduces it by £1.
Is interest in a cash ISA taxed?
No. GOV.UK says you do not usually pay tax on interest from Individual Savings Accounts (ISAs) and some National Savings and Investments. Interest from ISAs is not counted in this calculator's taxable interest.
What is GOV.UK's savings tax example?
A basic rate taxpayer earns £1,300 of savings interest. The first £1,000 is covered by the Personal Savings Allowance and the remaining £300 is taxed at 20%, so the tax due is £60.
How do I pay tax on savings interest?
Banks and building societies tell HMRC how much interest you earned. If you're employed or get a pension, HMRC usually collects tax through your tax code after sending a tax calculation. If your interest is more than £10,000, you need to report it on a Self Assessment tax return.
Method & sources
- Calculation: unused Personal Allowance first, then the starting rate for savings, then the Personal Savings Allowance for your band (interest added to other income); remaining interest taxed at 20%, 40% or 45% on top of your other income.
- Allowances, starting rate (£5,000, £17,570), Personal Savings Allowance (£1,000 / £500 / £0) and both examples: GOV.UK — gov.uk/apply-tax-free-interest-on-savings/how-much-is-tax-free.
- ISAs, joint accounts and how HMRC is told: GOV.UK — gov.uk/apply-tax-free-interest-on-savings. Paying the tax and the £10,000 Self Assessment rule: how you pay tax on savings interest.
- Personal Allowance, taper and 2026 to 2027 rates: GOV.UK — gov.uk/income-tax-rates.
- All sources checked 18 October 2026. Verification: automated tests, run before every update, including the GOV.UK examples.
- Reviewed: .
Educational estimate only, not personal financial or tax advice. HMRC's figures depend on your full income, tax code and reliefs. Rules can change and depend on your circumstances; confirm with GOV.UK or HMRC.
Run your own numbers
Enter your income and interest to see how much of it is tax-free.
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