Savings Interest Tax Calculator 2026/27
Savings Interest Tax Calculator 2026/27
Tax on interest
£1,000 tax free · keep £2,600 · effective 13.3%
2026/27 rates · Last checked · Sources in page details
Layers used
£3,000 interest broken down
£1,000
£2,000
Tax breakdown
Savings basic rate
20% on £2,000
£400
PSA by tax band
Basic rate
£1,000
Up to £50,270 income
Higher rate
£500
£50,270 to £125,140
Additional rate
£0
Above £125,140
Where your tax goes
Categories and shares come from HMRC's 2024/25 Annual Tax Summary methodology, using PESA 2025 and OBR March 2025 figures. The government does not set aside your exact tax for these areas, so this is only an estimate. Last reviewed 29 April 2026.
View source ↗on £400 savings interest tax
This is an estimate. The government does not set aside your exact tax for these areas.
Per-capita weekly welfare spend: £246.1bn (PESA 2025, Social Protection excl. state pensions) ÷ 67.6M UK population ÷ 52 weeks ≈ £70/week. This is not a Universal Credit claimant's entitlement; the standard allowance for a single adult 25+ is ~£92/week.
View source ↗£85
Welfare
≈ 1 weeks of welfare per citizen
Per-citizen daily NHS spend: £241.8bn (PESA 2025, Health) ÷ 67.6M ÷ 365 ≈ £9.80/day. The average national contribution per person per day, not the cost of any specific treatment.
View source ↗£84
Health
≈ 9 days of NHS care (per citizen)
New State Pension full rate, 2026/27: £241.05/week (4.7% triple-lock increase from April 2026). HMRC sources the £137.8bn pensions outturn from OBR March 2025.
View source ↗£48
State Pensions
≈ 0 weeks of state pension
£124.7bn in 2024/25 of interest on UK government gilts. Rose sharply from 2022 with higher interest rates and inflation-linked gilts. Now larger than the entire defence budget.
View source ↗£43
National Debt Interest
DfE per-pupil revenue funding (~£7,400/year for state schools) ÷ 195 school days ≈ £38/day. A blended primary/secondary average. Total education spend in HMRC's category (£118.7bn) also covers higher education, further education, and early years.
View source ↗£41
Education
≈ 1 school days funded
£63.6bn in 2024/25. UK defence spending is committed to rise from ~2.3% of GDP toward 2.5% by 2027.
View source ↗£22
Defence
+ £78 across public order & safety, transport, business & industry and 6 more
Estimates onlyShowHide
Calculations use HMRC published rates for education and illustration. They are not regulated financial, tax, or legal advice. Verify against your own tax position before filing or making financial decisions.
Background reading
UK savings interest tax in 2026/27
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Background reading
UK savings interest tax in 2026/27
The UK gives most savers some interest tax free through three layered allowances. Your unused personal allowance comes off first, then the £5,000 starting rate band (subject to taper), then the Personal Savings Allowance, £1,000 at basic rate, £500 at higher, nothing at additional. With base rates higher than for most of the last decade, even basic rate savers can find their PSA used up by a single account.
How much savings interest is tax free in 2026/27?
Three layers stack up: (1) the £5,000 starting rate band at 0%, available if your non-savings income is under £17,570; (2) the Personal Savings Allowance, £1,000 (basic rate), £500 (higher rate), £0 (additional rate); (3) any unused personal allowance.
Why does my savings allowance shrink at higher rate?
The Personal Savings Allowance was designed as a tax-equalisation measure. Basic rate gets £1,000 because £1,000 × 20% = £200, the same tax that would have been collected. Higher rate gets £500 (×40% = £200), and additional rate gets nothing because they're already paying the top rate.
Are ISAs better than ordinary savings accounts?
If your interest will exceed your PSA, yes. ISA interest is fully tax free regardless of band, no allowance, no reporting on Self Assessment. With base rates rising, even basic rate taxpayers can find their PSA used up quickly.
Do banks deduct tax from my savings interest automatically?
No. Since April 2016 banks pay interest gross. You owe any tax via PAYE adjustment or Self Assessment. HMRC gets the data from banks each year and adjusts your tax code.
Privacy, sources & last reviewed1 March 2026 · ShowHide
Privacy and independence
Built and maintained by Afterax as an independent educational UK tax calculator project. Calculations run in your browser using HMRC 2026/27 rates. Inputs can be saved on this device and included in share links.
Sources
Bands, thresholds and reliefs come from official sources and are checked when a Budget or in-year change is announced.
Last reviewed 1 March 2026 · updated for 2026/27 · view changelog →