Estimate how much Income Tax you may pay on savings interest, including the Personal Savings Allowance and Starting Rate for Savings.
This calculator helps you estimate how much Income Tax you may pay on savings interest. It considers your other taxable income, Personal Allowance, Personal Savings Allowance, and the Starting Rate for Savings where applicable.
Most savings interest is taxable in the UK, but many taxpayers can receive some interest tax-free through the Personal Savings Allowance and the Starting Rate for Savings. The amount of tax you pay depends on your total income and tax band.
The Personal Savings Allowance (PSA) is the amount of savings interest you can receive tax-free each year. For 2026/27, basic-rate taxpayers have a PSA of £1,000, and higher-rate taxpayers have a PSA of £500. Additional-rate taxpayers do not receive a PSA.
The Starting Rate for Savings allows some taxpayers to receive up to £5,000 of savings interest tax-free (for 2026/27). However, this rate is reduced by £1 for every £1 of other taxable income above the Personal Allowance. This means it is often only available to those with low other income.
Savings interest is taxed as the top slice of your income. Your other income uses up your Personal Allowance and the basic-rate band first, then savings interest is taxed on top. The Personal Savings Allowance and Starting Rate for Savings can reduce or eliminate the tax on savings interest.
It depends on your other income and tax band. You can earn up to £5,000 interest tax-free through the Starting Rate, but this is reduced by your other income above the Personal Allowance. Additionally, you have your Personal Savings Allowance (£1,000 for basic-rate, £500 for higher-rate taxpayers).
Yes, but they still receive a Personal Savings Allowance of £500 (for 2026/27). Interest above the allowance is taxed at the savings basic rate (20%) or higher rate (40%) depending on the amount.
No. For 2026/27, additional-rate taxpayers (with income above £125,140) do not receive a Personal Savings Allowance.
Savings interest is taxed under UK savings income rules, not Scottish Income Tax rates. Scottish rates apply to non-savings income only. This calculator applies the correct treatment.
Illustrative example only:
Other taxable income: £30,000
Savings interest: £2,000
1. Personal Allowance: £12,570
2. Starting Rate for Savings: £0 (other income exceeds the threshold)
3. Personal Savings Allowance: £1,000 (basic-rate taxpayer)
4. Taxable savings interest: £2,000 − £1,000 = £1,000
5. Estimated savings tax: £1,000 × 20% = £200
6. After-tax savings interest: £2,000 − £200 = £1,800
This example uses the same calculation logic as the live calculator for the 2026/27 tax year (England, Standard PA).
Some savings products, such as ISAs (Individual Savings Accounts), are tax-free and the interest earned on them is not taxable. This calculator estimates tax on taxable savings interest from bank accounts, building societies, and similar savings arrangements.
It depends on your income. You may have the Personal Savings Allowance (£1,000 for basic-rate, £500 for higher-rate taxpayers) and possibly the Starting Rate for Savings (up to £5,000, reduced by other income above the Personal Allowance).
The Personal Savings Allowance is the amount of savings interest you can receive tax-free. For 2026/27, it is £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers. Additional-rate taxpayers do not receive a PSA.
Yes, bank interest is generally taxable, but you may have allowances that reduce or eliminate the tax you pay.
Yes, but they receive a £500 Personal Savings Allowance (2026/27). Interest above this is taxable.
No. Additional-rate taxpayers (income above £125,140) do not receive a Personal Savings Allowance for 2026/27.
The Starting Rate for Savings is a 0% rate for savings income up to £5,000, but it is reduced by £1 for every £1 of other income above the Personal Allowance.
Savings interest uses UK savings income tax rules, not Scottish Income Tax rates. Scottish rates apply only to non-savings income.
No. National Insurance is not payable on savings interest.
No. ISAs (Individual Savings Accounts) are tax-free. Other savings accounts are generally taxable.
No. This is an independent tool for estimation purposes only. Always check with HMRC or a tax professional for accurate advice.
Disclaimer: This calculator provides an estimate only. It is not official HMRC software and does not constitute tax advice. Actual tax liability can differ, savings circumstances vary, tax-free savings products may be treated differently, the Personal Savings Allowance depends on tax position, other income can affect the result, Scottish rules require different treatment for some income, and complex circumstances may require professional advice.
Author: Adnan Ahmed
If you have dividend income as well as savings interest, use our UK Dividend Tax Calculator to estimate the tax on dividends separately. For a wider estimate of your personal tax position, use our UK Personal Tax Calculator. If you need a broader Income Tax estimate, our UK Income Tax Calculator can help.
You may also find our UK Tax Rate Calculator, UK After Tax Calculator, and UK Self Assessment Tax Calculator useful.
For broader tax rate information, visit SmartTaxCalculator.com.