Enter what you hold, what it pays and what else you earn. The calculator works out the tax on your interest for the 2026/27 tax year, and — unlike the usual version of this tool — it applies all three allowances that can cover savings interest rather than only the best known one.
Leave ISA balances out — that interest is outside the tax system and does not use any allowance.
Try one
Enter your balance, your rate and your other income to see the tax on your interest, which allowances cover it and how much room is left.
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Three Allowances, Not One
Most calculators for this ask two questions — how much have you got, and are you a basic or higher-rate taxpayer — and stop there. That is right for someone in full-time work and wrong for everyone else, because the Personal Savings Allowance is the last of three layers rather than the only one.
The first is the ordinary personal allowance of £12,570. Where your other income has not used all of it, interest fills the rest. The second is the starting rate for savings: a £5,000 band at 0% that exists precisely for people living on savings rather than wages. It falls by £1 for every £1 of non-savings income above £12,570, so it is exhausted by the time other income reaches £17,570. The third is the Personal Savings Allowance itself — £1,000, £500 or nothing.
Stacked, with no other income at all, they let £18,570 of interest through untaxed. Try the “living off savings” preset above and the panel shows all three doing their work.
The Line at £50,270
The savings allowance does not taper. It steps, from £1,000 to £500 the moment any part of your income reaches the higher rate — and your interest counts towards deciding that.
So one extra pound of interest, received at the wrong moment, can cost £100.40: £100 as half the allowance becomes taxable at 20%, plus 40p on the pound itself. The panel flags this when your total lands within £1,500 of the line, because that is the range where it is worth knowing before the year ends rather than after. The full explanation of the threshold and the cliff sets out the arithmetic.
The Balance Where Tax Starts
Tax falls on the interest, not on the money, so there is no limit on what you may hold. The balance at which tax begins is simply your tax-free room divided by your rate — £25,000 for a basic-rate taxpayer at 4%, £20,000 at 5%, £33,333 at 3%.
Which means the threshold falls as rates rise. A better account brings the tax forward, and a saver who was comfortably inside the allowance last year can be outside it this year without adding a penny. The panel reports the figure for whatever rate you enter. To check the arithmetic on a different rate quickly, the percentage calculator does the division in one line.
Questions About the Savings Allowance
How much interest can I earn before paying tax?
It depends on your other income as much as on your savings. On a salary above £17,570 the answer is £1,000 of interest while you stay a basic-rate taxpayer and £500 once any part of your income reaches the higher rate. With little or no other income it can be as much as £18,570, because the unused personal allowance and the £5,000 starting rate for savings both come into play first. Enter your figures above and the calculator shows which of the three is doing the work.
What balance can I hold before the tax starts?
Your tax-free room divided by your interest rate. A basic-rate taxpayer with the £1,000 allowance earning 4% crosses at £25,000; at 5% it is £20,000 and at 3% it is £33,333. The threshold falls as rates rise, which is the counter-intuitive part — a better account brings the tax forward. The panel shows the figure for the rate you enter.
What is the starting rate for savings?
A separate £5,000 band taxed at 0%, for people whose income comes mostly from savings rather than from work. It shrinks by £1 for every £1 of non-savings income above the £12,570 personal allowance, so it is gone once other income reaches £17,570. Below that it stacks with everything else, and it is the allowance most often missed — a pensioner with a small private pension can have several thousand pounds of interest entirely tax-free without realising it.
Why does one extra pound of interest cost me £100?
Because the savings allowance steps rather than tapers. You have £1,000 of it as a basic-rate taxpayer and £500 once any income reaches the higher rate, and interest counts towards deciding which you are. Crossing £50,270 of total income by a single pound converts £500 of tax-free interest into taxable income at 20%, which is £100, plus 40p on the pound itself. The panel warns you when your total is within £1,500 of that line.
Does ISA interest count?
No. Interest inside an ISA sits outside the tax system, uses none of your allowance, and does not appear in the income figure that decides your band. Leave ISA balances out of the box above. That second effect is the one people miss: an ISA does not only shelter its own interest, it also keeps that interest from pushing your total towards the line where the allowance halves.
How does HMRC collect the tax?
Banks and building societies report the interest they have paid you after the tax year ends, without being asked. If you are employed or drawing a pension, HMRC usually collects by adjusting your tax code, so the first sign is a coding notice rather than a bill. Where savings and investment income together exceed £10,000 a Self Assessment return is required instead.
Is this right for Scotland?
The tax on the interest is, because savings income is taxed at the same rates across the UK — Scotland's own rates apply to earnings and pensions, not to interest. What differs is that the Scottish and UK band thresholds do not line up, so if your income sits between them it is worth confirming your band with HMRC rather than assuming your salary band is also your savings band.
Which tax year does this use?
2026/27: a £12,570 personal allowance, the basic rate running to £50,270, the higher rate to £125,140, a £5,000 starting rate for savings tapering away by £17,570, and a savings allowance of £1,000, £500 or nothing according to your band.
