Savings interest calculator 2026/27
A savings calculator that answers the tax question too: what your savings earn in a year, and what HMRC takes — with the starting rate for savings and the personal savings allowance shown band by band, not assumed away.
Calculator
What is in your savings accounts. Money in an ISA does not belong here — ISA interest is not taxed and is not counted for any of the allowances below.
The AER your account pays. A quoted AER already includes the account's own within-year compounding, so one year's interest is the balance times the AER.
Interest for the year: £1,350.00. £1,350.00 from the balance and rate above. This is one year of simple interest on a balance that does not change — nothing is compounded and nothing is projected forward. If your balance moved during the year, or you already have the figure from a statement, use the box below instead.
Interest you already know the amount of — other accounts, fixed-rate bonds, credit union dividends, peer-to-peer lending. To tax a known interest figure and nothing else, put it here and leave the balance at £0.
Salary, pension, self-employment profit or rental profit before tax — everything except savings interest and dividends. It decides which band your interest lands in, so leaving it at £0 will understate your tax if you have any.
Savings interest is taxed at UK-wide rates wherever you live in the UK. Scottish rates and bands apply to earned income only — but your earned income still decides which UK savings band your interest meets, so this changes the answer.
Figures are 2026/27 income tax only. National Insurance is not charged on savings interest at any level of income, so there is none to show. Dividends, capital gains, student loan repayments and pension contributions are not modelled — if you have dividends as well, the dividend tax calculator takes all three kinds of income at once.
Every calculation runs in your browser. There is no application server and no database, so nothing you type is transmitted or stored. A share link is the exception: it carries your figures in the URL. What that means.
Tax on your savings interest, band by band
Tax on your savings interest: £70.00
On £1,350.00 of interest, that leaves £1,280.00. Your income tax due on everything, other income included, is £4,556.00, on £36,350 of total income, of which £23,780 is taxable after allowances — an effective rate of 12.53% across all your income.
Two figures could be called the tax on your interest and here they agree: adding up the savings bands gives £70.00, and having no interest at all would cut your bill by the same £70.00.
Where each pound of interest fell
Interest is the second slice of income, not the first. Your £22,430 of taxable non-savings income is taxed underneath it, and the interest starts where that finished — which is why the same interest costs different amounts to two people with different salaries.
| Band | Taxable income slice | Interest | Rate | Tax |
|---|---|---|---|---|
| Personal savings allowance | £22,430 – £23,430 | £1,000.00 | 0.00% | £0.00 |
| Basic rate | £23,430 – £23,780 | £350.00 | 20.00% | £70.00 |
| Tax on the interest | £70.00 |
The slice column is taxable income, measured from £0 after allowances — not your balance and not your salary. Bands shown at 0% still use up room in the stack, which is why a nil-rate band can change the rate on the income above it rather than removing that income from the calculation.
The two bands that shelter interest, and what each one did
1. The starting rate for savings
A band of £5,000 taxed at 0.00%, reduced £1 for every £1 of taxable non-savings income. It is the allowance almost no calculator shows, because it cannot be worked out without asking what else you earn.
None of it is available to you. Your taxable non-savings income of £22,430 is at or above the £5,000 band, and the band is reduced pound for pound by that income, so none is left for your interest. It reappears if your other income falls below the personal allowance plus £5,000.
2. The personal savings allowance
A nil-rate band whose size depends on the band you end up in — and your interest counts towards deciding which band that is.
| If you are a… | Personal savings allowance | Applies to you |
|---|---|---|
| Basic rate taxpayer | £1,000.00 | Yes |
| Higher rate taxpayer | £500.00 | — |
| Additional rate taxpayer | £0.00 | — |
The allowance that applies at this income level is £1,000.00, and £1,000.00 of your interest fell inside it. That figure describes the income you entered. It is not an amount of interest you can add without changing anything: more interest raises the income the allowance is set by, so receiving more can make the allowance itself smaller.
Allowances, including the part left unused
| Allowance | Available at this income | Used | Unused |
|---|---|---|---|
| Personal allowance | £12,570.00 | £12,570.00 | £0.00 |
| Starting rate for savings | £0.00 | £0.00 | £0.00 |
| Personal savings allowance | £1,000.00 | £1,000.00 | £0.00 |
| Dividend allowance | £500.00 | £0.00 | £500.00 |
Every figure here describes the allowance at the income you entered. An unused allowance is not the same thing as income you could still receive tax-free, because receiving more income can change the allowance itself — the personal savings allowance halves at the higher rate and disappears at the additional rate, and the interest that would fill it counts towards getting you there.
Where your next pound goes
- Your next £100 of interest costs £20.00 in tax. Measured by running the whole calculation again with the extra interest in it, so it includes any allowance the extra interest costs you as well as the tax on the interest itself.
- Your next £1 of other income — a pay rise, a bigger pension payment — is taxed at 20.00%. This is a different question from the one above: extra earnings can also shrink the allowance sheltering your interest, so a pound of salary and a pound of interest are not taxed alike.
Distance to the next threshold
Another £13,920 of income takes you into the Higher rate band.
The calculation measures that gap as £13,920 of taxable income, which is not the same figure and is not the one to act on. Here your allowance is fully used and your income is outside the taper, so the two happen to coincide. Reading the taxable figure as the income you can still take is the mistake this line exists to prevent — and on this page it matters twice over, because crossing that threshold also halves the allowance sheltering your interest.
One more pound could cost you £100.20. Another £13,921 of other income takes you to £48,921, and it is that pound — not the ones before it — that drops your personal savings allowance from £1,000.00 to £500.00. The pound before it costs £0.20 in tax. The allowance does not taper across the threshold, it steps, and it steps for the whole tax year rather than from that pound onwards — so the half that goes stops sheltering interest you were paid months earlier. Both figures are the difference between two full calculations, and the crossing pound was found by measurement rather than worked out from the threshold.
Worked example: 2026/27 interest on a small pension and a large deposit
Someone retired in England has £14,000 of pension income and £120,000 in a fixed-rate account paying 5.00% — £6,000 of interest for the 2026/27 tax year. Total income £20,000.
- The personal allowance of £12,570 covers most of the pension, leaving £1,430 of taxable non-savings income.
- The starting rate for savings is a £5,000 band at 0.00%, reduced £1 for every £1 of that taxable non-savings income — so £3,570 of it survives here, and every pound of interest that falls in it is taxed at nothing.
- The personal savings allowance takes the next £1,000, because total income of £20,000 keeps this taxpayer at the basic rate.
- What is left meets an ordinary rate. In full: £3,570 in the starting rate for savings band at 0.00%, then £1,000 in the personal savings allowance band at 0.00%, then £1,430 in the basic rate band at 20.00%, so the tax on the interest is £286.00 and the income tax due on everything is £572.00.
| Band | Taxable income slice | Amount | Rate | Tax |
|---|---|---|---|---|
| Basic rate (other income) | £0 – £1,430 | £1,430.00 | 20.00% | £286.00 |
| Starting rate for savings (interest) | £1,430 – £5,000 | £3,570.00 | 0.00% | £0.00 |
| Personal savings allowance (interest) | £5,000 – £6,000 | £1,000.00 | 0.00% | £0.00 |
| Basic rate (interest) | £6,000 – £7,430 | £1,430.00 | 20.00% | £286.00 |
| Income tax due | 2.86% | £572.00 |
The same interest, a different person
Move that identical £6,000 of interest onto a £60,000 salary and the tax on it goes from £286.00 to £2,200.00. Nothing about the savings account changed. Two things about the person did: the salary uses up the whole starting-rate band, and it makes them a higher-rate taxpayer, which halves the personal savings allowance from £1,000 to £500.
| Band | Taxable income slice | Amount | Rate | Tax |
|---|---|---|---|---|
| Basic rate (other income) | £0 – £37,700 | £37,700.00 | 20.00% | £7,540.00 |
| Higher rate (other income) | £37,700 – £47,430 | £9,730.00 | 40.00% | £3,892.00 |
| Personal savings allowance (interest) | £47,430 – £47,930 | £500.00 | 0.00% | £0.00 |
| Higher rate (interest) | £47,930 – £53,430 | £5,500.00 | 40.00% | £2,200.00 |
| Income tax due | 20.65% | £13,632.00 |
That is why this calculator asks what else you earn. “The tax rate on savings interest” is not a property of the savings account, and a calculator that does not ask cannot tell you either of the two figures above.
The pound in between
Those two people are far apart. The interesting case is the one standing between them. Take £48,000 of salary and £2,000 of interest, and walk the salary upwards a pound at a time. Each pound costs £0.20 in tax, over and over — until the one that arrives at £48,271, which costs £100.20.
Nothing about that pound is unusual. It is the pound that takes total taxable income past the higher-rate threshold, and the personal savings allowance does not taper across that line — it drops, from £1,000.00 to £500.00, for the whole tax year. The half that goes was sheltering interest paid months before, and it stops sheltering it retrospectively. This is the same mechanism as the trap above, seen from the other side: there, extra interest removed the allowance; here, extra salary does.
The calculator shows this figure for whatever you enter, and it finds the crossing pound by running the calculation on each side of it rather than by dividing a threshold by a rate.
Methodology and sources
The formula
- Add up all your income and deduct the personal allowance of £12,570. Above £100,000 that allowance is withdrawn by £1 for every £2 of income, so it is gone by £125,140. The allowance is allocated across your income types in whichever way produces the lowest bill, which the taxpayer is entitled to (Income Tax Act 2007 s.25(2)).
- Tax what is left in the statutory order: non-savings income first, then savings interest, then dividends. Interest is the second slice, not the first, so it starts where your salary or pension finished.
- Apply the starting rate for savings — a £5,000 band at 0.00%, reduced pound for pound by taxable non-savings income, and therefore gone entirely once that income reaches £5,000.
- Apply the personal savings allowance: £1,000 at the basic rate, £500 at the higher rate and £0 at the additional rate. Which one you get is decided by your total taxable income — the interest included. It is always measured against the UK-wide bands, so a Scottish intermediate-rate taxpayer is a UK basic-rate taxpayer for this purpose.
- Tax the rest of the interest at the ordinary savings rates, which are UK-wide.
Both nil-rate bands are bands, not deductions. Interest covered by them is taxed at 0% but still occupies room in the stack, which is why filling an allowance can push the income above it into a higher band rather than sliding everything down.
Savings rates, 2026/27
| Band | Taxable income from | Rate on interest |
|---|---|---|
| Starting rate for savings | — | 0.00% on up to £5,000, less your taxable non-savings income |
| Personal savings allowance | — | 0% on £1,000 / £500 / £0 by band |
| Basic rate | £0 | 20.00% |
| Higher rate | £37,700 | 40.00% |
| Additional rate | £125,140 | 45.00% |
Those thresholds are taxable income, after allowances, and they are UK-wide. Savings interest is taxed on these bands in Scotland too — the Scottish rates and bands apply to earned income only, because income tax on savings and dividend income is reserved. Your Scottish earned income still matters, since it decides where the interest sits in the stack; it is the thresholds the interest meets that are not Scottish.
How the interest figure is worked out
The balance times the rate, for one tax year. Nothing is compounded and nothing is projected forward: a quoted AER already contains the account’s own within-year compounding, so one year’s interest on a balance left alone is the balance times the AER. If your balance moved during the year, or the account paid a different rate than the headline one, use the figure from your statement in the second box and leave the balance at £0 — the tax calculation runs on the interest, not on the balance.
Interest is taxed when it is credited to your account, which for a multi-year fixed-rate bond may not be the year you expected. A bond that pays all its interest at maturity can put several years of interest into one tax year and past both allowances at once. This calculator taxes one year at a time and cannot know which year your account credits.
A change already legislated for, dated 6 April 2027
From 6 April 2027 the arithmetic on this page changes shape. Savings income stops sharing a rate schedule with earned income and gets one of its own, and property income — which this calculator does not take at all — is taxed after other income but before savings, so the stacking order described above gains a step in the middle of it. HMRC set both out in the technical note Change to tax rates for property, savings and dividend income, published 26 November 2025. The starting rate for savings and the personal savings allowance are not changed by it, so everything this page explains about those two bands still holds.
Every tax year this calculator currently offers falls before that date, and in each of them the rates charged on interest are the same as the rates charged on a salary — checked against the rules files rather than stated from memory. No rate on this page is typed into the copy: every figure is read from the rules file for the year you selected, so when a rules file for a later year is added the tables, the worked example and this paragraph all follow it instead of contradicting it.
Sources
- gov.uk — Change to tax rates for property, savings and dividend income (the 6 April 2027 change above)
- gov.uk — Tax on savings interest
- gov.uk — Income tax rates and allowances
- gov.scot — Scottish income tax rates and bands
- gov.uk — Individual Savings Accounts
Contains public sector information licensed under the Open Government Licence v3.0.
What has been verified, and what has not
The rates, thresholds and allowances this calculator uses were checked against gov.uk and gov.scot on 12 August 2026, figure by figure. That check covers the published rates only. It does not verify any result this page produces, and no named person has signed the check off yet. Treat the output as a calculation you can check — the breakdown above shows every step for exactly that reason — not as advice, and not as a figure to file a return from without checking it.
What this calculator does not do
- ISA interest. Interest inside an ISA is not taxed and does not count towards any allowance here, so it does not belong in the balance box at all. Putting it there will invent a tax bill you do not have.
- Dividends and capital gains. Both are taxed on their own schedules and both sit above interest in the stack. If you have dividends as well, use the dividend tax calculator, which takes salary, interest and dividends together.
- Anything that changes your income. Pension contributions, Gift Aid donations, student loan repayments and the marriage allowance are not modelled — and the first two extend or reduce the bands that decide your savings allowance, so they can move the answer a long way.
- How the tax gets paid. Banks have not deducted tax at source since April 2016. HMRC usually collects it by changing your tax code or through self assessment, often a year later and on an estimate of the year before. This page tells you the amount, not the timing.
- Joint accounts, trusts and children’s accounts. Interest on a joint account is normally split equally and each holder has their own allowances; enter your share.
Every calculation runs in your browser. There is no application server and no database, so nothing you type is transmitted or stored. A share link is the exception: it carries your figures in the URL. What that means.
Savings interest tax questions
- How much tax do I pay on my savings interest?
It depends on the rest of your income, because interest is taxed as the second slice of it. Two nil-rate bands come first: the starting rate for savings, a £5,000 band at 0.00% that is reduced £1 for every £1 of taxable non-savings income, and the personal savings allowance of £1,000, £500 or £0 depending on the band you end up in. Anything left is taxed at your ordinary savings rate. On £14,000 of pension income, £6,000 of interest costs £286.00 in 2026/27; the same interest on a £60,000 salary costs £2,200.00.
- What is the starting rate for savings, and do I get it?
It is a band of £5,000 of interest taxed at 0.00%, and it is reduced pound for pound by your taxable non-savings income — so it is gone completely once that income reaches £5,000, which is a salary of about £17,570. It is worth the most to people with a small pension or a low salary and a large deposit, which is exactly the group most calculators cannot model because they never ask what else you earn. This one shows how much of the band survives at your income and how much of your interest fell into it.
- Does an unused personal savings allowance mean I can earn that much interest tax-free?
Not necessarily, and this is the trap the page is built around. The allowance is set by the band your total income puts you in — and the interest itself counts towards that. On £50,000 of income in 2026/27 the calculation reports the whole £1,000 allowance as unused, and receiving £1,000 of interest costs £146.00, because that interest is what makes you a higher-rate taxpayer and halves the allowance. So the page never captions an unused allowance as spare tax-free income: it recalculates with the interest included and shows what it would actually cost.
- Is savings interest taxed differently in Scotland?
No. Income tax on savings interest is reserved, so the UK-wide rates and bands apply wherever in the UK you live — the Scottish rates and bands apply to earned income only. Your Scottish earned income still matters, because it decides where your interest sits in the stack and therefore which UK band it meets, but the thresholds the interest crosses are the UK ones: £37,700 and £125,140 of taxable income. A Scottish taxpayer can therefore pay a Scottish rate on the top of their salary and a UK rate on their interest in the same year.
- Do I pay National Insurance on savings interest?
No. National Insurance is charged on earnings and on self-employed profit, never on savings interest, at any level of income. That is why this calculator shows income tax only and has no National Insurance figure to leave out.
- Does interest in an ISA count?
No, and it should not be entered here. Interest inside a cash ISA is not taxable, does not use up the starting rate for savings and does not count towards the personal savings allowance or towards deciding which band you are in. The ISA subscription limit for 2026/27 is £20,000. Entering ISA money in the balance box will invent a tax bill you do not have.
- How much more interest can I receive before I reach the next band?
Read the gross figure in the breakdown, not the taxable one. Distance to a threshold is naturally measured in taxable income, and the two are not the same: any unused personal allowance sits between them, and between £100,000 and £125,140 each extra £1 of income also withdraws 50p of allowance, so £1.50 of taxable income costs only £1 of income there. This page converts the figure before showing it. Bear in mind that crossing that threshold also halves the personal savings allowance sheltering your interest, so the last pound before it and the first pound after it are not taxed alike.
- How is the tax on my interest actually collected?
Banks and building societies have paid interest gross since April 2016, so nothing has been deducted before it reached you. They report the interest to HMRC, which normally collects the tax by adjusting your PAYE tax code — often for a later year and based on an estimate of the last one — or through self assessment if you file a return. This calculator works out the amount due for a tax year; it does not model when or how HMRC asks for it.
- Is this a savings calculator or a savings interest calculator?
Both, because for tax they are the same question. This page takes one tax year of savings interest — either a balance and a rate, or a figure from your statement — and works out the income tax on it. What it is not is a savings projection: there is no term, no monthly deposit and no compounding, so it cannot tell you what a pot will be worth in ten years. For that, the compound interest calculator handles a balance plus regular deposits, and the investment calculator adds growth assumptions and fees. Neither of those applies any tax, and this one applies nothing but.
Open the compound interest calculator or the investment calculator.
- Can one extra pound of salary really cost me more than a pound in tax?
Yes, and on savings interest it is not close. The personal savings allowance does not taper as your income rises — it steps, from £1,000 to £500 to £0, on total taxable income with the interest counted in. On £48,000 of salary with £2,000 of interest in 2026/27, the pound of pay arriving at £48,271 costs £100.20 in tax while the pound before it costs £0.20 — because that pound halves the allowance, for the whole year, over interest you were already paid. The breakdown shows the same figure for the income and interest you enter, and finds the crossing pound by calculating on both sides of it rather than by applying a rate to a threshold.
- Is the tax on savings interest about to change?
Yes, on a date that is already known. From 6 April 2027 savings income stops sharing a rate schedule with earned income and gets one of its own, and property income is taxed after other income but before savings — so the stacking order this page describes gains a step. HMRC published the detail in its technical note on changes to tax rates for property, savings and dividend income on 26 November 2025. The starting rate for savings and the personal savings allowance are not changed by it. Every tax year offered in the selector above falls before that date, and this calculator reads its rates from the rules file for the year you pick, so it will show the new schedule rather than the old one as soon as a rules file for a later year exists.
- Why does your answer differ from my bank’s or another calculator’s?
Almost always because the other one did not ask what else you earn. Both bands that shelter interest depend on it: the starting rate for savings is reduced pound for pound by taxable non-savings income, and the personal savings allowance is £1,000, £500 or £0 according to the band your total income reaches. A calculator that applies one rate to your interest cannot be right for anyone whose interest straddles a threshold — and this page shows the band-by-band working so you can see which step you disagree with.