🏦

Personal Savings Allowance Calculator 2026/27

Calculate exact UK tax due on your bank interest, see your statutory £1,000 or £500 PSA allowance, and discover how much you can save with a Cash ISA.

✅ Official 2026/27 PSA Rates 💰 0% Starting Rate Supported 🎁 100% Free Calculator
⭐ Add UKTaxRates to Google Preferred Sources for instant answers:

⚡ Personal Savings Allowance 2026/27 (Quick Benchmark)

Statutory Rates

The Personal Savings Allowance (PSA) lets you earn interest on savings tax-free up to statutory thresholds based on your income tax band. Non-ISA interest above your allowance is taxed at your marginal income tax rate (20%, 40%, or 45%):

Income Tax Band Taxable Non-Savings Income Tax-Free Savings Allowance (PSA) Tax Rate on Excess Interest
Basic Rate £12,571 to £50,270 £1,000 / year 20%
Higher Rate £50,271 to £125,140 £500 / year 40%
Additional Rate Over £125,140 £0 (No allowance) 45%
💡 Low Earner Bonus: If your salary is under £17,570, you also unlock the 0% Starting Rate for Savings on up to an additional £5,000 of interest!

1. Enter Your Details

Wages, pension, trading
Fixed term & easy access

2. Savings Tax Breakdown

Tax Due on Savings Interest
£100.00
Effective tax rate on interest: 6.67%
Your Income Tax Band: Basic Rate (20%)
Personal Savings Allowance (PSA): £1,000.00
0% Starting Rate Applied: £0.00
Total Tax-Free Interest Kept: £1,000.00
Taxable Interest Excess: £500.00
🛡️ Cash ISA Tax Shield
By holding your taxable savings in a Cash ISA, you would save £100.00/year in tax. ISA interest is 100% tax-free and does not consume your PSA.
The £50,270 Higher Rate Cliff-Edge: Earning just £1 over the £50,270 higher-rate threshold cuts your tax-free savings allowance in half (from £1,000 down to £500) and doubles your tax rate on excess interest to 40%. Check your tax band here.

What is the UK Personal Savings Allowance for 2026/27?

The Personal Savings Allowance (PSA) allows UK taxpayers to earn interest on bank accounts and savings products tax-free up to statutory thresholds based on their income tax band.

Income Tax BandTaxable Non-Savings IncomeTax-Free Savings Allowance
Basic Rate (20%)£12,571 to £50,270£1,000 per year
Higher Rate (40%)£50,271 to £125,140£500 per year
Additional Rate (45%)Over £125,140£0 (No allowance)

Step-by-Step Savings Interest Tax Calculations (Worked Examples)

Compare the tax payable on £1,500 in annual bank interest by a basic-rate earner versus a higher-rate earner.

Basic Rate Earner (£35k Salary)

£1,000 PSA • 20% Marginal Tax Rate

Total Savings Interest£1,500.00
Tax-Free PSA Allowance−£1,000.00
Taxable Interest Balance£500.00
Total Tax Due (20%)£100.00
Effective Tax Rate on Interest6.67%

Higher Rate Earner (£65k Salary)

£500 PSA • 40% Marginal Tax Rate

Total Savings Interest£1,500.00
Tax-Free PSA Allowance−£500.00
Taxable Interest Balance£1,000.00
Total Tax Due (40%)£400.00
Effective Tax Rate on Interest26.67%

Frequently Asked Questions About Savings Tax

How much savings interest can you earn tax-free in 2026/27?

Basic-rate taxpayers can earn up to £1,000 in savings interest tax-free each year. Higher-rate (40%) taxpayers receive a £500 allowance, while Additional-rate (45%) taxpayers receive £0.

What is the 0% Starting Rate for Savings?

If your non-savings income (such as wages or pension) is under £17,570, you can earn up to an additional £5,000 in savings interest at a 0% tax rate.

How do you pay tax on savings interest exceeding the PSA?

Banks automatically report interest to HMRC. If you earn interest above your allowance, HMRC collects the tax automatically by reducing your PAYE tax code or via Self Assessment.

Official Statutory Data Reference

Rates and calculations on this page are cross-referenced with official UK Government legislation: GOV.UK Tax on Savings Interest and Allowances (2026/27).