Savings guides
Tax on your savings interest: this year and next
Put in your income and your savings outside ISAs. The calculator applies HMRC's published rates and allowances for 2026/27 and 2027/28 and shows every step of the sum. Nothing you type leaves this page.
2026/276 April 2026 to 5 April 2027
Tax on interest: £250
11.11% of your interest. Tax on the next £1 of interest: 20%.
£2,250 interest − £1,000 tax-free = £1,250 × 20% = £250
Workings, line by line
- Personal allowance£12,570 (total income £37,250 is not over £100,000)
- Other income after the allowance£35,000 − £12,570 = £22,430 taxable
- Starting rate for savings (0%)£5,000 − £22,430 other income above the allowance: none left
- Personal savings allowance (0%)Taxable income £24,680 is within the basic rate band (up to £37,700): £1,000
- Basic rate£1,250 × 20% = £250
- Tax on interest£250 = £250
- Adjusted net income is taken as total income: pension contributions and Gift Aid, which reduce it and widen the basic rate band, aren't included.
A cash ISA
Up to £20,000 a year can go into cash ISAs. With £20,000 of these savings in a cash ISA at the same rate: £250 tax with £50,000 outside ISAs − £70 with £20,000 of it in a cash ISA = £180 a year.
2027/286 April 2027 to 5 April 2028
Rates announced, not yet law
Tax on interest: £300
13.33% of your interest. Tax on the next £1 of interest: 24%.
£2,250 interest − £1,000 tax-free = £1,250 × 24% = £300
Workings, line by line
- Personal allowance£12,570 (total income £37,250 is not over £100,000)
- Other income after the allowance£35,000 − £12,570 = £22,430 taxable
- Starting rate for savings (0%)£5,000 − £22,430 other income above the allowance: none left
- Personal savings allowance (0%)Taxable income £24,680 is within the basic rate band (up to £37,700): £1,000
- Basic rate£1,250 × 24% = £300
- Tax on interest£300 = £300
- The 2027/28 savings rates (24%, 44%, 49%) were announced at Budget 2026 and still need to pass in the Finance Bill.
- Adjusted net income is taken as total income: pension contributions and Gift Aid, which reduce it and widen the basic rate band, aren't included.
A cash ISA
Up to £20,000 a year can go into cash ISAs. With £20,000 of these savings in a cash ISA at the same rate: £300 tax with £50,000 outside ISAs − £84 with £20,000 of it in a cash ISA = £216 a year.
Cash ISAs
The ISA allowance is £20,000 a year, and all of it can go into cash ISAs in 2026/27. A £12,000 cap on cash ISAs for under-65s from 6 April 2027 was set in law in 2026 (it applied to anyone aged 64 or under at the end of the tax year), but at Budget 2026 on 28 October 2026 the government said the cash ISA limit will stay at £20,000 for all savers over 18, with new regulations to be laid in November 2026. This page uses £20,000 for 2027/28 and will be updated if that changes.
The rules it uses
- Personal allowance £12,570, reduced by £1 for every £2 of income over £100,000 (gone at £125,140). It covers your other income first, then interest.
- Starting rate for savings: up to £5,000 of interest at 0%, less £1 for every £1 of other income above the personal allowance. It's gone once other income reaches £17,570.
- Personal savings allowance: £1,000 for basic rate, £500 for higher rate, nothing for additional rate.
- Interest is taxed on top of your other income: basic rate up to £37,700 of taxable income, higher rate up to £125,140, additional rate above.
- Savings rates: 20%, 40% and 45% in 2026/27. For 2027/28 the government announced 24%, 44% and 49% at Budget 2026 on 28 October 2026, replacing the 22%, 42% and 47% announced a year earlier. The new rates still need to pass in the Finance Bill.
- Scotland: Scottish rates and bands apply to salary, pensions and other non-savings income only. Interest is taxed at the UK savings rates, and the band it falls in is worked out on UK bands, so the tax on interest is the same as elsewhere in the UK. Scottish rates for 2027/28 haven't been published yet.
- Cash ISAs: the ISA allowance is £20,000 a year. The planned cut to £12,000 a year in cash ISAs for under-65s from 6 April 2027 was reversed at Budget 2026; the government says new regulations keeping £20,000 will be laid in November 2026.
Facts and arithmetic, not tax advice. The calculator treats your income as your adjusted net income, so it doesn't allow for pension contributions, Gift Aid, the marriage allowance, the blind person's allowance or other reliefs, and it doesn't work out tax on dividends. HMRC normally collects tax on interest through your tax code or Self Assessment. If you're unsure about your own position, HMRC or a qualified tax adviser can help. Rates and allowances checked on 30 October 2026.
