Savings Interest Tax Calculator United Kingdom
This savings interest tax calculator applies the 2026/27 £5,000 starting rate, the £1,000 or £500 Personal Savings Allowance and then your marginal rate.
What it does
The Savings Interest Tax Calculator works out the Income Tax due on your savings interest for 2026/27 after the starting rate for savings and the Personal Savings Allowance, based on how much other (non-savings) income you have.
Data sources & parameters
The figures below drive this calculator. We keep them aligned with the latest official guidance, and each result recalculates automatically whenever a value changes.
| Parameter | Value | Source | Last updated |
|---|---|---|---|
| Personal allowance | 12,570 | gov.uk | Effective 2026-04-06 |
| Basic-rate limit | 50,270 | gov.uk | Effective 2026-04-06Label corrected. The stored value was right; the label named a different figure and is shown to readers in the data-sources box. |
| Additional-rate threshold | 125,140 | gov.uk | Effective 2026-04-06Label corrected. The stored value was right; the label named a different figure and is shown to readers in the data-sources box. |
| Personal allowance taper start | 100,000 | gov.uk | Effective 2026-04-06 |
| Income tax basic rate | 0.2 | gov.uk | Effective 2026-04-06 |
| Income tax higher rate | 0.4 | gov.uk | Effective 2026-04-06 |
| Income tax additional rate | 0.45 | gov.uk | Effective 2026-04-06 |
| Personal Savings Allowance — basic-rate taxpayer | 1,000 | gov.uk | Effective 2026-04-06Personal Savings Allowance for basic-rate taxpayers (tax-free savings interest) |
| Personal Savings Allowance — higher-rate taxpayer | 500 | gov.uk | Effective 2026-04-06Personal Savings Allowance for higher-rate taxpayers |
| Starting rate for savings band | 5,000 | gov.uk | Effective 2015-04-06£5,000 starting-rate band legislated for 2026/27 to 2030/31 (Finance Act 2026); row now open-ended. Source: gov.uk Budget 2025 OOTLAR; audit 2026-09-23 |
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Taxable savings = interest − starting-rate band used − PSA used; tax = taxable savings × your marginal rate
How it works
It first sets your personal allowance, tapering it away above £100,000, then measures how much of the £5,000 starting-rate band survives your non-savings income. It applies your Personal Savings Allowance (£1,000, £500 or nil), taxes the rest at your marginal rate, and shows what stayed tax-free.
Where it is used
- Checking whether savings interest pushes you into paying tax
- Seeing how much of the £5,000 starting rate you keep
- Comparing a taxable account with an ISA before you move money
Worked example
On £30,000.00 of other income, £2,000.00 of interest leaves … tax-free, with … taxed and … of tax to pay.
Savings interest is taxable in the UK, but allowances mean most people pay nothing on it. This calculator applies the 2026/27 rules, the £5,000 starting rate for savings, the Personal Savings Allowance and your marginal Income Tax rate, to show how much of your interest is taxed and how much stays tax-free. Enter the interest from ordinary (non-ISA) accounts and your other, non-savings income.
Why savings interest is taxed differently
Your £12,570 personal allowance covers the first slice of income, and above that income is taxed at 20% up to the £50,270 basic rate limit, 40% up to £125,140 and 45% beyond. Savings interest is treated as sitting on top of your other income, so your other earnings decide which band the interest falls into and how much of the savings reliefs survive. Above £100,000 of total income the personal allowance itself is withdrawn at £1 for every £2 of income.
The starting rate for savings
The first relief is the starting rate for savings, a band of up to £5,000 of interest taxed at 0%, aimed at people with little other income. Every £1 of non-savings taxable income above your personal allowance removes £1 of the band. With non-savings income at or below £12,570 the full £5,000 is available; at £17,570 it has shrunk to zero. It is valuable to pensioners, part-time workers and people living mainly on savings, and of no use to most full-time earners.
The Personal Savings Allowance
The Personal Savings Allowance gives basic rate taxpayers £1,000 of interest tax-free and higher rate taxpayers £500. Additional rate taxpayers, with total income above £125,140, get nothing. The allowance does not taper gradually; it steps down as total income crosses each band boundary. Your interest counts towards total income, so a large interest payment can itself move you from the £1,000 allowance to £500.
How the two reliefs combine
The calculator works out your personal allowance (tapered if your income is high enough), measures your non-savings taxable income and reduces the £5,000 starting rate band accordingly. Interest inside the remaining band is taxed at 0%. It then applies your Personal Savings Allowance of £1,000, £500 or nil to the interest left. Only what is left after both reliefs is taxable, at your marginal rate. The donut chart splits your interest into the part covered by the starting rate, the part covered by the allowance and the part taxed.
A worked example
Suppose you have £30,000 of non-savings income and £2,000 of savings interest. With the full £12,570 personal allowance, £17,430 of your other income is taxable, past the point where the starting rate band disappears. Total income of £32,000 is in the basic rate band, so you keep the full £1,000 allowance. That covers half the interest; the other £1,000 is taxed at 20%, a bill of £200.
Now take £3,000 of interest with other income of £14,000. Only £1,430 of the other income is above the personal allowance, so the starting rate band falls from £5,000 to £3,570, enough to cover all £3,000 of interest at 0%. Nothing is taxed, and the Personal Savings Allowance is not needed.
Assumptions and limitations
This is a planning estimate using the 2026/27 allowances, thresholds and rates, stored as parameters and reviewed each tax year. It treats the other income you enter as non-savings income (earnings, pension or rental profit, not dividends), and taxes all taxable interest at one rate, so it does not split interest that straddles the £50,270 or £125,140 lines. If your other income is below £12,570, it does not set the unused personal allowance against your interest, so the real tax may be lower than shown. Dividends have their own allowance and rates and are not modelled, and ISA interest is ignored because it is tax-free. For a definitive figure, check current HMRC guidance or speak to an accountant.
About This Tool: Tax on Savings Interest
Tax on savings interest: use this tool to get an instant, accurate estimate. The figures follow official GOV.UK guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Tax year 2026
Frequently asked questions
How much savings interest can I earn tax-free in 2026/27?
What is the starting rate for savings?
Is the Personal Savings Allowance on top of the starting rate?
Do additional rate taxpayers get a Personal Savings Allowance?
Does interest inside an ISA count?
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