Savings interest tax calculator
Tax year 2026/27, for England and Northern Ireland, Scotland, Wales. Shows how much of your interest is tax free and what the rest costs, this year and from 6 April 2027.
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Tax on your savings interest
£100a year
- Interest kept
- £1,400
- Tax free
- £1,000
- Effective rate on interest
- 6.67%
£500.00 of the interest is taxed, at 20%.
Under 2027/28 as announced so far, the same inputs give £120.00 of tax, £20.00 more than in 2026/27. The savings basic rate moved from 20% to 24%; the savings higher rate moved from 40% to 44%; the savings additional rate moved from 45% to 49%.
The working
| Line | Rate | On | A year | Source |
|---|---|---|---|---|
| £1,500.00 | ||||
| Interest received in the year, before tax: £1,500.00. | ||||
| £30,000.00 | ||||
| Pay, pensions and other taxable income apart from interest and dividends: £30,000.00. It is taxed first, so it sets where the interest sits in the bands. | ||||
| £0.00 | gov.uk | |||
| The standard allowance is £12,570.00. All of it is used by other income, so none is left for interest. | ||||
| 0% | £0.00 | £0.00 | gov.uk | |
| Other income above the allowance (£17,430.00) uses up the whole £5,000 starting rate band, so none of the interest is taxed at 0% here. | ||||
| 0% | £1,000.00 | £0.00 | gov.uk | |
| Total taxable income of £18,930.00 is in the basic rate band, so the allowance is £1,000. £1,000.00 of interest falls in it at 0%. | ||||
| 20% | £500.00 | −£100.00 | gov.uk | |
| Interest from £18,430.00 to £18,930.00 of taxable income: £500.00 × 20% = £100.00. | ||||
| £500.00 | −£100.00 | |||
| £500.00 of interest is taxed; the total is £100.00. | ||||
How this is calculated
- Personal allowance. Your other income uses the £12,570 allowance first. Whatever is left goes against interest at 0%. Above £100,000 of total income the allowance tapers.
- Starting rate for savings. A £5,000 band at 0%, reduced by every pound of other income above the allowance.
- Personal savings allowance. £1,000 if your total taxable income is within the basic rate limit of £37,700, £500 up to £125,140, and nothing above that.
- Savings rates. Interest left after those is stacked on top of your other income and taxed at 20%, 40% or 45% depending on which band it lands in. Taxable amounts are rounded down to the pound.
The rounding conventions are listed in the methodology, and the formulas run from the open rules file for 2026/27.
Rules used
- Tax year
- 2026/27 (6 April 2026 to 5 April 2027)
- Nation
- England and Northern Ireland
- Figures
- Checked on 7 November 2026. Status: in force.
- Next scheduled change
- 6 April 2027: New tax year. Savings and property income rates rise to 24%, 44% and 49%, the trading allowance rises to £3,000, the Pension Tax Allowance begins and the mileage rate above 10,000 miles rises to 35p.
- Every figure
- Rates and allowances for 2026/27, each with its source and the date it was checked.
What changes on 6 April 2027
New tax year. Savings and property income rates rise to 24%, 44% and 49%, the trading allowance rises to £3,000, the Pension Tax Allowance begins and the mileage rate above 10,000 miles rises to 35p.
- The savings basic rate: 20% to 24% (announced)
- The savings higher rate: 40% to 44% (announced)
- The savings additional rate: 45% to 49% (announced)
You can switch the tax year above to see the result under 2027/28 as announced so far.
What this does not do. It treats other income as pay or pensions taxed at the main rates and does not model dividends, a marriage allowance transfer, a tax code adjustment, Gift Aid, or interest from an ISA or from abroad. It never suggests what to do with the result.
Questions people ask
- How much interest can I earn before paying tax?
- It depends on your other income. With none, the personal allowance of £12,570, the £5,000 starting rate for savings and the £1,000 personal savings allowance together cover £18,570 of interest in 2026/27. With pay or a pension above £17,570 the starting rate is gone and a basic rate taxpayer has £1,000, a higher rate taxpayer £500 and an additional rate taxpayer £0.
- What is the starting rate for savings?
- A £5,000 band of interest taxed at 0%, available when your other taxable income is below £17,570. Every pound of other income above the personal allowance reduces the band by a pound, so it is used up once pay or pension reaches £17,570. The ledger shows how much of it is left for you.
- What changes for savings interest in April 2027?
- The savings rates rise from 20%, 40% and 45% to 24%, 44% and 49% from 6 April 2027, as announced at Budget 2026. The personal savings allowance and the starting rate are unchanged. The line under the figure shows the same interest under 2027/28.
- How does HMRC collect tax on savings interest?
- Banks and building societies report the interest they paid after 5 April each year. HMRC then adjusts a tax code or sends a calculation for the previous year. Interest from an ISA is not taxed and is not reported.
- Is savings interest taxed differently in Scotland?
- No. Savings rates, the starting rate and the personal savings allowance are set for the whole UK. Scottish income tax bands apply to pay and pensions, which is what sets how much allowance and starting rate is left for interest.
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