Savings Interest Tax Calculator 2025-26
Find out how much tax you pay on savings interest in 2025-26. Your Personal Savings Allowance (PSA) means basic rate taxpayers can earn £1,000 of interest tax-free, and higher rate taxpayers £500.
Personal Savings Allowance 2025-26
| Interest earned | Net (basic rate) | Tax (basic rate) | Net (higher rate) | Tax (higher rate) | Net (additional rate) | |
|---|---|---|---|---|---|---|
| £250 | £250 | £0 | £250 | £0 | £137 | Details → |
| £500 | £500 | £0 | £500 | £0 | £275 | Details → |
| £750 | £750 | £0 | £650 | -£100 | £412 | Details → |
| £1,000 | £1,000 | £0 | £800 | -£200 | £550 | Details → |
| £1,500 | £1,400 | -£100 | £1,100 | -£400 | £825 | Details → |
| £2,000 | £1,800 | -£200 | £1,400 | -£600 | £1,100 | Details → |
| £2,500 | £2,200 | -£300 | £1,700 | -£800 | £1,375 | Details → |
| £3,000 | £2,600 | -£400 | £2,000 | -£1,000 | £1,650 | Details → |
| £4,000 | £3,400 | -£600 | £2,600 | -£1,400 | £2,200 | Details → |
| £5,000 | £4,200 | -£800 | £3,200 | -£1,800 | £2,750 | Details → |
| £6,000 | £5,000 | -£1,000 | £3,800 | -£2,200 | £3,300 | Details → |
| £7,500 | £6,200 | -£1,300 | £4,700 | -£2,800 | £4,125 | Details → |
| £10,000 | £8,200 | -£1,800 | £6,200 | -£3,800 | £5,500 | Details → |
| £15,000 | £12,200 | -£2,800 | £9,200 | -£5,800 | £8,250 | Details → |
| £20,000 | £16,200 | -£3,800 | £12,200 | -£7,800 | £11,000 | Details → |
| £25,000 | £20,200 | -£4,800 | £15,200 | -£9,800 | £13,750 | Details → |
| £30,000 | £24,200 | -£5,800 | £18,200 | -£11,800 | £16,500 | Details → |
What is the Personal Savings Allowance?
The Personal Savings Allowance (PSA) lets you earn savings interest without paying income tax on it, up to a set limit each year. In 2025-26 the allowance is £1,000 for basic rate taxpayers, £500 for higher rate taxpayers, and £0 for additional rate taxpayers (income above £125,140).
Banks and building societies pay interest gross — they no longer deduct tax at source. Instead, HMRC collects any tax through Self Assessment or by adjusting your PAYE tax code.
Starting Rate for Savings
If your non-savings income (employment, pension, self-employment) is below £17,570, you may also qualify for the Starting Rate for Savings (SRS) — up to £5,000 of interest taxed at 0%. The SRS band is reduced by £1 for every £1 of non-savings income above the Personal Allowance (£12,570).
For example, if your salary is £15,000: non-savings income above £12,570 is £2,430, so your SRS band is £5,000 − £2,430 = £2,570 at 0%. On top of this, your £1,000 PSA (if you are a basic rate taxpayer) also applies, meaning up to £3,570 of interest could be entirely tax-free.
How is savings interest taxed above the PSA?
Any interest above your PSA (and SRS if applicable) is added to your income and taxed at your marginal rate — 20% for basic rate taxpayers, 40% for higher rate taxpayers, and 45% for additional rate taxpayers. The table above shows the net interest you keep after tax at each rate.
ISA alternative
Cash ISAs pay interest completely free of income tax, with no limit on the amount of interest earned (up to the annual ISA allowance of £20,000 in 2025-26). If your savings interest regularly exceeds your PSA, moving some savings into a Cash ISA may reduce your tax bill.