Tools
Savings Interest Tax Calculator UK 2026/27: What You Owe
Enter your savings interest and your other income to see the tax due on that interest for 2026/27, and how much more interest you could earn before any tax is owed. The point most people miss: the personal savings allowance is not the only tax-free slice. If your other income is low, unused personal allowance and the 5,000 pound starting rate for savings can cover far more interest than the 1,000 pound allowance alone.
How much tax is due on your savings interest?
How savings interest is taxed
Interest is stacked on top of your earnings, pension and other non-savings income, and below any dividends. Three layers can then make it tax free, applied in this order:
- Unused personal allowance. If your other income is under 12,570 pounds, the leftover allowance covers interest first.
- The starting rate for savings. Up to 5,000 pounds of interest is taxed at 0 percent, but this band shrinks by 1 pound for every 1 pound of other income above your personal allowance. Once your other income passes 17,570 pounds it is gone.
- The personal savings allowance (PSA). 1,000 pounds for basic rate taxpayers, 500 pounds for higher rate taxpayers and nothing for additional rate taxpayers. Your band is set by your total income, including the interest itself, so a modest rise in interest can push you over the higher rate threshold and halve your allowance.
Whatever is left is taxed at the savings rates for the band it falls into. The 0 percent slices still use up basic rate band, which is why interest can tip someone into higher rate tax even when it was partly tax free.
What to include, and what to leave out
Include interest from bank and building society accounts, fixed-term bonds, notice accounts, most credit union accounts and interest distributions from bond funds held outside a wrapper. Count interest in the tax year it is paid or credited to you, not the year it was earned. For a joint account, enter your share, usually half.
Leave out anything inside a cash ISA, stocks and shares ISA, Lifetime ISA or pension, and Premium Bond prizes, which are tax free. If you use the balance and rate boxes above, remember that a fixed-rate bond paying all its interest at maturity counts in full in the year it matures.
How HMRC collects it
Banks pay interest gross and report it to HMRC. If you are employed or receive a pension, HMRC usually collects any tax due by changing your tax code, often a year in arrears. If you already file a Self Assessment return, the interest goes on it. HMRC asks people with more than 10,000 pounds of savings and investment income to register for Self Assessment. Check your tax code or your HMRC online account if you think the figure HMRC holds is wrong.
This calculator uses England, Wales and Northern Ireland bands for non-savings income: a 12,570 pound personal allowance, tapered by 1 pound for every 2 pounds of income above 100,000 pounds, a 37,700 pound basic rate band and the additional rate on taxable income above 125,140 pounds. If your interest takes your income over 100,000 pounds, the result also counts the extra tax on your other income caused by the smaller personal allowance. These thresholds are frozen, and the 2027/28 option assumes they stay the same; it applies the savings rates of 22, 42 and 47 percent announced at the November 2025 Budget, which may change before April 2027. Savings interest is taxed at the same rates and bands across the UK, but Scottish taxpayers pay Scottish rates on their other income, so treat the result as a close estimate and check the PSA position on GOV.UK. It does not adjust for pension contributions or Gift Aid, which reduce the income used for the taper. It is an estimate, not tax advice.
