Cash savings feel simple until interest starts leaking into tax. This page estimates what survives after the Personal Allowance, the starting rate for savings, and the Personal Savings Allowance have all had their say.
Scope note: this calculator uses the 2026/27 UK savings-interest rules and England, Wales, and Northern Ireland band structure for estimating how your savings interest is taxed.
Salary, pension income, rental income, or other taxable income before savings interest.
Optional, but useful because dividend income can reduce your Personal Savings Allowance.
Estimated tax due on your taxable savings interest
£0After-tax savings interest kept: £0
After-tax savings interest kept£0Personal Savings Allowance used£0Starting rate for savings used£0Personal Allowance used against savings£0
PSA tierBasic-rate PSA: £1,000Interest taxed at 20%£0Interest taxed at 40% / 45%£0 / £0
What this means
Interest is taxed after your non-savings income has already used up part of the band structure. That is why a modest amount of savings interest can still be fully sheltered for one person and partly taxable for another.
How the Personal Savings Allowance (PSA) and Starting Rate for Savings band combine for typical UK savers in 2026/27.
Jamie — basic-rate taxpayer with £40,000 in easy-access savings
Annual salary
£28,000
Savings balance
£40,000 at 4.5% AER
Interest earned
£1,800
PSA (basic rate)
£1,000
The math:
£1,000 covered by PSA — tax-free
Remaining £800 taxed at 20% basic-rate
Tax on savings: £800 × 20% = £160
Result: Jamie nets £1,640 from his savings interest. Moving £18,000 of the savings into a Cash ISA next April would push him under the PSA threshold permanently and save the £160 tax bill each year.
Priya — higher-rate taxpayer with NS&I + bank savings
Salary
£72,000
NS&I Premium Bonds prize earnings
£600 (tax-free)
Bank savings interest
£2,400
Total taxable interest
£2,400
PSA (higher rate)
£500
The math:
£500 covered by PSA — tax-free
Remaining £1,900 taxed at 40% higher-rate
Tax on savings: £1,900 × 40% = £760
Premium Bonds prizes are completely tax-free regardless of amount
Result: Priya nets £1,640 of her £2,400 bank interest, plus the £600 from Premium Bonds tax-free. For higher-rate taxpayers, every £1 of bank interest above £500 costs 40p — Premium Bonds and Cash ISAs become genuinely attractive.
Figures use 2026/27 UK tax-year rates and thresholds. Always verify against your specific payslip or tax statement before acting.
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Savings interest can be covered in several stages. Any spare Personal Allowance hits first, then the starting rate for savings if your other income is low enough, then the Personal Savings Allowance based on your overall tax band.
The starting rate for savings can be worth up to £5,000, but it shrinks as your non-savings income rises.
The PSA is usually £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers, and £0 for additional-rate taxpayers.
Large dividend income can reduce your PSA tier even though dividends are taxed after savings interest.
This page estimates tax on taxable savings interest for the 2026/27 tax year. It is not a full self-assessment calculation and does not attempt to cover every special relief.