Personal Savings Allowance Calculator, 2026/27

How this is calculated

The personal savings allowance lets basic rate taxpayers earn £1,000 of savings interest tax-free each year, and higher rate taxpayers £500. Additional rate taxpayers, with income above £125,140, get no allowance at all.

This calculator works out your tax band from your other taxable income, applies the matching allowance, and shows how much of your interest is covered versus how much is taxable at your marginal rate.

There is also a separate starting rate for savings of up to £5,000, available where your non-savings income is low enough to leave room in the basic rate band, but this mainly helps people with modest earnings and larger savings pots.

Interest that counts

Interest from bank and building society accounts, savings bonds, credit union accounts and most peer-to-peer lending counts towards the personal savings allowance. Interest earned inside an ISA does not, because ISA interest is already tax-free regardless of the allowance.

Banks and building societies now pay interest gross, without deducting tax, and report the annual total to HMRC directly, so any tax due on interest above the allowance is usually collected through a tax code adjustment or self-assessment.

Managing interest across tax bands

Savers who are close to the boundary between basic and higher rate, or higher and additional rate, can sometimes reduce their overall tax by using pension contributions or Gift Aid to bring taxable income down, which both frees up more of the higher personal savings allowance and reduces the rate charged on interest above it.

Married couples and civil partners can also consider moving savings into the name of whichever partner has the lower income or more unused allowance.

How much is the personal savings allowance in 2026/27?

£1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers, with income over £125,140, receive no personal savings allowance.

Does ISA interest use up my personal savings allowance?

No. Interest earned within an ISA is already tax-free and does not count towards, or use up, your personal savings allowance.

Do I need to declare savings interest if it is under the allowance?

Usually not separately, but banks report interest totals to HMRC, and if you already complete a self-assessment return you should still include the gross interest figure on it.

What happens if interest pushes me into a higher tax band?

Your allowance reduces once you cross into the higher or additional rate band, so a large interest payment can both reduce your own allowance and increase the rate charged on the excess.