Most basic-rate taxpayers can earn £1,000 of savings interest tax-free. Enter your income and interest to see your allowance band and the tax on anything above it.
PSA by income band · 2026/27
The Personal Savings Allowance (PSA) lets you earn savings interest tax-free each year. The amount depends on your Income Tax band — and unlike most allowances, higher earners get less:
| Tax band | Personal Savings Allowance 2026/27 |
|---|---|
| Basic rate (20%) | £1,000 |
| Higher rate (40%) | £500 |
| Additional rate (45%) | £0 |
On top of the PSA, there's a separate £5,000 starting rate for savings, taxed at 0%. You only benefit if your non-savings income is below £17,570 — the £5,000 band reduces £1 for every £1 of income over the £12,570 Personal Allowance. It's most useful for pensioners and low earners with large savings.
Interest above your PSA (and any starting-rate band) is taxed at your marginal Income Tax rate — 20%, 40% or 45%. Banks no longer deduct tax at source, so HMRC usually collects it through your tax code. See the full position with the savings interest tax calculator and the income tax calculator.
It's £1,000 for basic-rate, £500 for higher-rate and £0 for additional-rate taxpayers in 2026/27.
No — Cash ISA interest is tax-free and doesn't touch your PSA. Only taxable accounts count towards the allowance.
An extra 0% band of up to £5,000, available when your other income is below £17,570 — mainly useful for pensioners and low earners.
HMRC usually collects it by adjusting your tax code, or through Self Assessment — banks no longer deduct it at source.
