Personal Savings Allowance and starting rate, 2026–27
Savings interest can fall within an unused Personal Allowance, the starting rate for savings and the Personal Savings Allowance. These are separate rules, administered by HMRC.
- Personal Savings Allowance
- Basic rate £1,000; higher rate £500; additional rate £0.
- Starting rate
- 0% on up to £5,000 in 2026–27, reduced by other income.HMRC, Tax on savings interest
Separate allowances
Unused Personal Allowance can cover savings interest. The starting rate and Personal Savings Allowance may apply on top, depending on income. HMRC, Tax on savings interest (opens in a new tab).
The Personal Savings Allowance is £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers and £0 for additional-rate taxpayers. Interest is included when establishing the tax band. HMRC, Tax on savings interest (opens in a new tab).
The starting rate depends on other income
HMRC publishes a 0% starting rate on up to £5,000 of savings income for 2026–27. This is a tax rule set in legislation passed by Parliament, not an account rate set by a bank. HMRC, Income Tax rates and allowances (opens in a new tab).
Other taxable income excluding savings interest and dividends must be below £17,570. Each £1 above the Personal Allowance reduces the starting-rate amount by £1. The starting rate can coexist with the Personal Savings Allowance. HMRC, Tax on savings interest (opens in a new tab).
Accounts and scope
HMRC adds interest from savings accounts together. The allowance does not restart at each bank or account. HMRC, Tax on savings interest (opens in a new tab).
ISA interest is generally exempt under the wrapper rules. Foreign savings and children’s accounts have separate rules. HMRC, Tax on savings interest (opens in a new tab).
This is general information adapted from HMRC guidance under the Open Government Licence v3.0, without endorsement. The site’s UK income tax calculator excludes these savings rules, so this guide supplies no calculated savings-tax example or personal tax result.