Savers & higher-rate taxpayers
Do I pay tax on my savings interest?
With savings rates back up, more people are quietly slipping over their allowance for the first time. Put in your other income and the interest you expect this tax year and see exactly what — if anything — is taxable: your starting rate for savings, your Personal Savings Allowance, the tax due and what you actually keep. 2026/27 rates, worked in your browser.
Your 2026/27 income
Rough figures are fine. Nothing is sent anywhere; this runs entirely in your browser. Leave out any interest earned inside an ISA — that is always tax-free and never counts.
The three things that shelter your interest
Your savings interest is taxed as the top slice of your income, but three separate allowances usually soak up most or all of it before any tax is due:
- Your Personal Allowance (£12,570). If your other income doesn't use it all, the spare part covers interest tax-free.
- The starting rate for savings (up to £5,000 at 0%). It shrinks by £1 for every £1 of other income above your Personal Allowance, and disappears once that income reaches £17,570 — so it mainly helps people with low wages or pensions but sizeable savings.
- The Personal Savings Allowance. £1,000 of interest tax-free if you're a basic-rate taxpayer, £500 if you're higher-rate, and £0 if you're an additional-rate taxpayer.
Why more people are being caught
The Personal Savings Allowance hasn't changed since 2016, but interest rates have climbed. £1,000 of tax-free interest now needs only around £20,000 in an easy-access account — so ordinary savers, not just the wealthy, are starting to owe tax. If you don't do a tax return, HMRC usually collects it by changing your tax code the following year.
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Common questions
How much savings interest can I earn before paying tax?
It depends on your other income. A basic-rate taxpayer gets a £1,000 Personal Savings Allowance and a higher-rate taxpayer gets £500, both at 0%. On top of that, if your non-savings income is low you can also use up to £5,000 of "starting rate for savings" band and any unused Personal Allowance — so someone with little other income can receive well over £18,000 of interest tax-free. The calculator above works out your own tax-free total.
What is the starting rate for savings?
It's an extra 0% band of up to £5,000 for savings interest. It's aimed at people with low earned income, so it reduces by £1 for every £1 of other income above your £12,570 Personal Allowance and reaches nil once your other income hits £17,570. If your wages or pension already use it up, it won't help — but for early retirees or people living off savings it can be worth a lot.
What is the Personal Savings Allowance for 2026/27?
£1,000 of interest tax-free for basic-rate taxpayers, £500 for higher-rate taxpayers and £0 for additional-rate taxpayers. Your band is worked out by adding the interest to the rest of your income, so a large amount of interest can itself push you from the £1,000 allowance down to £500.
Do I pay tax on ISA interest?
No. Interest earned inside a cash ISA (or any ISA) is completely tax-free and doesn't use up any of your allowances, so leave it out of this calculator. Only interest from ordinary savings accounts, bonds, credit union accounts and similar counts towards the figures above.
How does HMRC collect tax on my savings interest?
Banks and building societies report the interest they pay you to HMRC after the tax year ends. If you don't complete a Self Assessment return, HMRC usually collects any tax due by adjusting your tax code for a later year. If you do file a return, you report the interest there. You need to register for Self Assessment if your savings and investment income is over £10,000.
Does interest count towards the £100,000 Personal Allowance taper?
Yes. Savings interest is part of your total income, so a big enough amount can start tapering away your £12,570 Personal Allowance once your income passes £100,000, and can tip you into the higher or additional rate — which also shrinks your Personal Savings Allowance. The calculator above takes the taper into account.
See it inside your whole tax picture
This page answers one question. If you're self-employed or file a Self Assessment return, savings interest is just one line on a bigger bill. The paid Self Assessment Tax Estimator adds your interest to your income and profit and works out the whole thing — Income Tax, Class 4 National Insurance and the monthly amount to set aside — so nothing catches you out in January.
- Self Assessment Tax Estimator 2026/27 — your complete bill, salary plus self-employment plus other income, with the set-aside and payment-on-account dates worked out for you.
- Freelance Day-Rate & Profit Calculator — work backwards from the take-home you need.
- Rental Property ROI & Yield Calculator — for anyone with a buy-to-let alongside.
- Invoice Tracker & Log — paid, outstanding and overdue, automatically.
Excel and Google Sheets. Working formulas, not just formatting. Built and checked by us, with AI assistance, and every calculation verified.
Get the Tax Estimator — £9 →£9 on its own, or all four tools for £19, with a 14-day money-back guarantee.