FullWorkings UK tax and finance calculators

Tax on savings interest

2026-27

Your income

Savings interestEverything outside an ISA — banks, building societies, bonds, peer-to-peer. £
Everything elseWages, pension, self-employment, rent. It decides how much of each allowance you keep. £

What the interest costs

Tax on savings interest £0.00 a year
Interest received£0.00
Taxable£0.00
Tax£0.00
Interest you keep£0.00

Your allowances

Starting rate for savings left£0.00
Personal Savings Allowance£0.00
Effective rate on the interest—
Rate on the next £100—
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How this is worked out

Three allowances can cover savings interest, and they apply in a fixed order: whatever is left of your Personal Allowance, then the starting rate for savings, then the Personal Savings Allowance.

⚠ The starting rate is eaten by your other income

It is worth up to £5,000 — but every pound of other income above your Personal Allowance takes a pound off it. So it is worth the full amount to someone with no other income, and nothing at all once other income reaches £17,570.

That number is £12,570 plus £5,000, which is why the two figures look unrelated and are not. This is the rule that catches people: a pensioner with £18,000 of pension has no starting rate at all, while one with £15,000 has £2,570 of it.

⚠ Interest decides its own allowance

The Personal Savings Allowance depends on which tax band you are in, and gov.uk is explicit that you work that out by adding the interest to your other income. So interest can push you into the higher band and halve the allowance that was about to shelter it.

That is a cliff edge rather than a taper, and it is why the rate on the next £100 shown above can be far higher than any headline rate. Someone just under the higher-rate threshold can pay a great deal more than 40% on a small extra amount of interest.

Both are 0% bands, not exemptions

The starting rate and the Personal Savings Allowance still use up room in your basic rate band. They do not push the rest of your interest down into a lower band — the same rule as the dividend allowance, and the same mistake.

Scotland does not change this

gov.uk says in as many words that you pay the same tax as the rest of the UK on savings interest. The Scottish rates apply to wages and pensions, not to this, so the page has no region to choose.

What this does not cover

ISAs and some National Savings products, which are outside all of this and do not use up any allowance. Foreign interest and any foreign tax on it. Children's accounts, which have their own rules when a parent provided the money. Interest paid net of tax, which has been unusual since 2016. Dividends, which are taxed after savings and have their own allowance — see the dividend tax calculator.

Where these figures come from

Every figure above is read from a dated rate file rather than written into the page, and each one is checked against the gov.uk page it came from. How these numbers are kept right sets out the whole process.

Dividend tax calculator