About the UK Savings Interest Tax Calculator
This calculator works out how much Income Tax you owe on savings interest in the UK. Enter your other taxable income (salary, self-employed profit, pensions, rental profit) and the interest you expect to earn outside ISAs, and it applies the three tax-free layers in the order HMRC uses: any unused Personal Allowance, the starting rate for savings of up to £5,000, and the Personal Savings Allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate, nothing for additional-rate). Whatever interest is left is taxed at your savings rate.
It is for savers whose interest has grown with higher rates and who want to know whether they will owe tax, how much, and whether moving money into a cash ISA or Premium Bonds is worthwhile. In the 2026/27 tax year the Personal Allowance is £12,570, the basic rate band is £37,700 and the additional rate starts above £125,140, with savings taxed at 20%, 40% and 45%. From 6 April 2027 the government is raising the rates on savings income by 2 percentage points (22%, 42% and 47%); choose 2027/28 to see the effect, which assumes the allowances and bands stay at 2026/27 levels.
Assumptions: figures are for an individual; dividends, pension contributions and Gift Aid (which can change your band) are not included, and the Personal Allowance is tapered by £1 for every £2 of income above £100,000. Savings income is taxed at these UK rates for Scottish and Welsh taxpayers too, although Scottish income tax bands on your other income can change the result slightly. Banks pay interest gross, so tax is usually collected through your tax code or Self Assessment.
With the default inputs, the tax on savings interest is £200.00. Change any value above to recalculate instantly.
How to use the uk savings interest tax calculator
- 1Enter your other taxable income for the tax year, before tax.
- 2Enter the savings interest you expect to receive outside ISAs.
- 3Choose the tax year.
- 4Read the tax due, the allowances used and your interest after tax.
- 5If tax is due, consider moving savings into a cash ISA.
Formula and method
HMRC taxes non-savings income first, then savings income. Any Personal Allowance not used by your other income covers interest first. The starting rate for savings is a 0% band of up to £5,000, reduced £1 for every £1 of other taxable income above the Personal Allowance, so it disappears once other income reaches £17,570. Next comes the Personal Savings Allowance: £1,000 if your taxable income stays within the basic rate band, £500 if it reaches the higher rate band and £0 for additional-rate taxpayers.
Interest covered by the starting rate and PSA is taxed at 0% but still uses up your basic rate band. The remaining interest is taxed at the savings rate for the band it falls in: 20%, 40% or 45% in 2026/27, and 22%, 42% or 47% from 2027/28. The marginal rate shows the tax on an extra £100 of interest, expressed per £100.
- PA
- Personal Allowance (£12,570, tapered above £100,000)
- SRS
- Starting rate for savings band (up to £5,000 at 0%)
- PSA
- Personal Savings Allowance (£1,000 / £500 / £0)
Worked examples
Basic-rate taxpayer with £2,000 of interest
With a £30,000 salary the starting rate for savings is used up (other income exceeds £17,570). The £1,000 Personal Savings Allowance covers half the interest, and the other £1,000 is taxed at 20% = £200.
Higher-rate taxpayer with £3,000 of interest
A higher-rate taxpayer gets a £500 PSA. The other £2,500 of interest is taxed at 40%, so £1,000 is due.
Low earner using the starting rate for savings
Other income is £2,430 above the Personal Allowance, so the £5,000 starting rate shrinks to £2,570. Add the £1,000 PSA and £3,570 is tax-free; the remaining £2,430 is taxed at 20% = £486.
Same higher-rate saver in 2027/28
From April 2027 the higher savings rate is 42%, so the £2,500 of taxable interest costs £1,050 — £50 more than in 2026/27.
Frequently asked questions
How much savings interest can I earn tax-free in the UK?+
Basic-rate taxpayers can earn £1,000 of interest tax-free under the Personal Savings Allowance, higher-rate taxpayers £500 and additional-rate taxpayers nothing. On low incomes the starting rate for savings can add up to £5,000 more, and interest in ISAs is always tax-free.
What is the starting rate for savings?+
It is a 0% band of up to £5,000 of savings interest. It is reduced £1 for every £1 of other taxable income (wages, pension, profits) above the £12,570 Personal Allowance, so it is available only if your other income is below £17,570.
How do I pay tax on savings interest?+
Banks pay interest without deducting tax. HMRC receives interest figures from banks and usually collects any tax due by adjusting your tax code or by sending a tax calculation letter after the tax year ends. If you already complete Self Assessment, declare the interest on your return instead.
Is the tax on savings interest going up?+
Yes. The government announced that the Income Tax rates on savings income will rise by 2 percentage points across all bands from April 2027, to 22% basic, 42% higher and 47% additional. The allowances are unchanged by that measure.
Does savings interest count towards my tax band?+
Yes. Interest is added to your other income to decide your tax band, even the part covered by the Personal Savings Allowance. Large amounts of interest can push you into the higher rate band and cut your PSA from £1,000 to £500.
Is interest on a fixed-rate bond taxed when it is paid?+
Interest is generally taxable in the tax year it is paid or credited to you. With a multi-year bond that pays all interest at maturity, the whole amount can fall into one tax year, so annual-interest options can help you use your PSA each year.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.