Will your savings interest be taxed?
With higher interest rates, more people are paying tax on savings. See whether you will, now and when the rates rise in April 2027.
Your answer
Enter your savings, the interest rate and your income to see if you'll pay tax.
About this calculator
For savers with money outside ISAs. Most basic-rate taxpayers can earn £1,000 of interest a year tax-free, higher-rate taxpayers £500, and additional-rate taxpayers nothing.
People on lower incomes can earn up to £5,000 more tax-free, through the starting rate for savings.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
Interest is added on top of your other income. Any tax-free allowance your other income doesn't use covers interest first, then the starting rate for savings, then your tax-free interest allowance. Interest above those is taxed at 20%, 40% or 45%, rising to 22%, 42% and 47% from 6 April 2027.
Worked example
You'd pay £120 tax on your £1,600 of interest this year, and £132 from 6 April 2027.
2026/27 tax year · other income £40,000 · 4% interest for the whole year
| Interest on £40,000 at 4% | £1,600 |
|---|---|
| Your tax-free interest as a basic-rate taxpayer (the Personal Savings Allowance) | − £1,000 |
| Interest that's taxed | £600 |
| Taxed at 20% | £120 |
| Tax on your interest, 2026/27 | £120 |
| From 6 April 2027, at the new rates | £132 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), on a yearly basis.
Questions people ask
Does the same apply in Scotland?
Yes. Savings interest is taxed at UK rates wherever you live, even though Scotland has its own rates for pay.
How does HMRC collect it?
Banks tell HMRC how much interest you've earned. HMRC usually collects the tax by changing your tax code, or through your tax return if you fill one in.
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