£15,000 Savings at 5.5% — Tax on Interest 2025-26
Annual interest earned: £825 · Personal Savings Allowance applied
Tax breakdown — £15,000 savings at 5.5%
| Taxpayer band | PSA | Taxable interest | Tax owed | Net interest |
|---|---|---|---|---|
| Basic rate (salary ≤ £50,270) | £1,000 | £0 | £0 @20% | £825 |
| Higher rate (£50,270–£125,140) | £500 | £325 | £130 @40% | £695 |
| Additional rate (over £125,140) | Nil | £825 | £371 @45% | £454 |
Frequently asked questions
How much tax do I pay on interest from £15,000 savings at 5.5%?
Interest earned: £825/year. Basic rate taxpayer (salary under £50,270): tax £0, net interest £825 — the first £1,000 is covered by your Personal Savings Allowance. Higher rate taxpayer (salary £50,270-£125,140): tax £130, net £695 (PSA is only £500). Additional rate taxpayer (salary over £125,140): no PSA, tax £371, net £454.
What is the Personal Savings Allowance for 2025-26?
The PSA allows basic rate taxpayers to earn £1,000 in savings interest tax-free per year, and higher rate taxpayers £500. Additional rate taxpayers (over £125,140) have no PSA — all interest is taxed at 45%. ISA interest is always tax-free and does not count toward the PSA.
At 5.5%, what balance triggers a tax bill for a basic rate taxpayer?
A basic rate taxpayer's PSA covers £1,000 of interest. At 5.5% interest, this is used up at a balance of £18,182. With £15,000 at 5.5%, your interest is £825, so you are fully within the PSA and pay no tax on this interest.
Should I put £15,000 in an ISA or savings account?
A cash ISA pays tax-free interest regardless of your tax band. A regular savings account uses your PSA first (which fully covers your £825 interest at 5.5%). If you are a higher or additional rate taxpayer, an ISA is more valuable. Basic rate taxpayers may not benefit from an ISA if interest stays within their £1,000 PSA.
Do I need to declare savings interest on £15,000 to HMRC?
If your total savings interest exceeds your Personal Savings Allowance (£1,000 basic rate / £500 higher rate / nil additional rate), you must declare the excess to HMRC. At 5.5% on £15,000, your interest is £825/year. This is within the basic rate PSA of £1,000 — no declaration needed for basic rate taxpayers, but higher and additional rate taxpayers must report the taxable portion.
How much will £15,000 grow to in 5 years at 5.5%?
With compound interest at 5.5% per year, £15,000 grows to approximately £19,604 after 5 years and £25,622 after 10 years (before tax). Each year you earn roughly £825 in interest, which then compounds. If you are a basic rate taxpayer, the after-tax interest is £825/year, giving a net compound balance of approximately £19,604 after 5 years.