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Tax on savings interest calculator
See how much tax you owe on savings interest for 2026/27, based on your other income.
Checked against GOV.UK for 2026/27. Last reviewed 2 October 2026. Spotted a mistake? Tell us.
Your tax on interest
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How tax on savings interest works
The Personal Savings Allowance
You can earn some savings interest tax-free each year. The allowance is £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers and nothing for additional-rate taxpayers. It depends on your top tax band, not on how much interest you earn.
The starting rate for savings
If your other income is low, you may get up to £5,000 of savings interest taxed at 0% as well. It is reduced by £1 for every £1 of your other taxable income over the Personal Allowance, so it disappears once your income passes £17,570. It sits on top of the Personal Savings Allowance, and the two can add up.
The tax rates
Interest above your allowances is taxed at 20% for basic-rate, 40% for higher-rate and 45% for additional-rate taxpayers. It counts as the next slice of income after your salary and pension.
How to keep more
Use your ISA allowance, since ISA interest does not count. A spouse or civil partner who pays less tax may be able to hold more of the savings. See the savings calculator to compare rates, and the ISAs explained guide.
What this calculator assumes
- 2026/27 rates and allowances for England, Wales and Northern Ireland. Savings interest uses the same rates in Scotland, but Scottish bands change which band your income falls in.
- Interest is paid gross, or counted gross, and is the only savings income. Dividends and gains are not included.
- Your income is a single yearly figure from one source, with no other tax adjustments.
Questions people ask
Do I pay tax on £1,000 of interest?
Not if you are a basic-rate taxpayer, because your £1,000 Personal Savings Allowance covers it. A higher-rate taxpayer has a £500 allowance, so £500 would be taxable.
Does my bank take tax off interest?
No. Banks and building societies pay interest in full. HMRC collects any tax due through your tax code, or through Self Assessment.
Does ISA interest count?
No. Interest in a cash ISA is tax-free and does not use your Personal Savings Allowance.
What if I earn very little?
If your other income is below £17,570 you may qualify for the starting rate for savings, so up to £5,000 of interest could be tax-free on top of the Personal Savings Allowance.
Is what I type stored or shared?
No. The calculation runs in your browser and nothing you enter is sent to us. Our privacy page has the details.
Is this financial advice?
No. It gives an estimate for information only. For advice about your own situation, speak to a regulated adviser.