Tax-Free Interest Calculator UK 2026/27
Find out how much savings interest you can earn tax-free using your Personal Savings Allowance and Starting Rate for Savings
Assumes income and interest fall in the same tax year, no Scottish income tax rates, and no dividend income. For guidance only.
How much interest is tax-free in 2026/27?
Most savers can earn some interest completely tax-free, through up to three allowances stacked together. First, if your income is below the £12,570 Personal Allowance, any unused portion shelters savings interest first. Second, the starting rate for savings offers 0% tax on up to £5,000 of interest, but it shrinks pound-for-pound as your non-savings income rises above £12,570, and disappears entirely once that income reaches £17,570. Third, almost everyone gets a Personal Savings Allowance (PSA): £1,000 tax-free for basic-rate taxpayers, £500 for higher-rate taxpayers, and £0 for additional-rate taxpayers earning over £125,140.
Personal Savings Allowance by tax band (2026/27)
| Basic rate (income up to £50,270) | £1,000 tax-free |
| Higher rate (£50,271–£125,140) | £500 tax-free |
| Additional rate (over £125,140) | £0 tax-free |
Frequently asked questions
Most people get a tax-free Personal Savings Allowance: £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers, and £0 for additional-rate taxpayers. On top of this, if your non-savings income is below £17,570 you may also get some or all of the £5,000 0% starting rate for savings. If your income is below your £12,570 Personal Allowance, unused allowance can shelter savings interest too.
For 2026/27 the Personal Savings Allowance is £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers, and £0 for additional-rate taxpayers (those earning over £125,140).
The starting rate for savings is a 0% tax rate on up to £5,000 of savings interest. It only applies if your non-savings income is below £17,570 (your £12,570 Personal Allowance plus the £5,000 starting rate band), and it reduces pound-for-pound as non-savings income rises above £12,570.
Banks report interest paid directly to HMRC, who usually adjust your tax code or send a Simple Assessment automatically if tax is due. You only need to declare it yourself via Self Assessment if you already file a tax return.
Only if your interest exceeds your tax-free allowances. Most people can earn up to £1,000 (basic rate), £500 (higher rate) tax-free through the Personal Savings Allowance, plus the £5,000 0% starting rate for savings and any unused Personal Allowance if your income is low. Additional-rate taxpayers get no Personal Savings Allowance. Use the calculator above to see your exact tax-free amount.
Worked example
A basic-rate taxpayer earning £30,000 a year with £1,500 of savings interest:
| Annual income | £30,000 |
| Unused Personal Allowance | £0 (income exceeds £12,570) |
| Starting rate for savings | £0 (income exceeds £17,570) |
| Personal Savings Allowance | £1,000 (basic rate) |
| Total tax-free interest | £1,000 |
| Taxable interest (£1,500 − £1,000) | £500 |
| Tax due (20% of £500) | £100 |
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Results are estimates based on 2026/27 HMRC rates for England, Wales and Northern Ireland (not Scottish income tax bands), assuming no dividend income. They do not constitute financial or tax advice.