You get these allowances each tax year (6 April to 5 April). If you paid too much tax on savings, you can claim it back.
Quick facts
- Basic rate
- £1,000 tax-free
- Higher rate
- £500 tax-free
- Additional rate
- £0
- Starting rate for savings
- Up to £5,000
- Other income under
- £17,570 for the starting rate
Personal Savings Allowance
- Basic rate: £1,000
- Higher rate: £500
- Additional rate: £0
To work out your tax band, add all the interest you’ve earned to your other income.
Starting rate for savings
If your other taxable income (not including savings interest or dividends) is less than £17,570, you can get the starter rate for savings. This means you can earn up to £5,000 of interest and not have to pay tax on it.
The more you earn from other income (for example your wages or pension), the less your starting rate for savings will be. Every £1 of other income above your Personal Allowance reduces your starting rate for savings by £1.
You can get the starting rate for savings as well as a Personal Savings Allowance.
Personal Allowance
If your Personal Allowance is not fully used by your wages, pension or other income, HMRC will apply it to your savings interest.
Large amounts of interest
If your bank or building society tells HMRC that you have more than £10,000 in savings interest, HMRC will send you a notice to file a tax return.
Common questions
How much savings interest is tax-free?
£1,000 for basic rate taxpayers and £500 for higher rate taxpayers, plus up to £5,000 more if your other income is under £17,570.
What is the starting rate for savings?
Up to £5,000 of interest tax-free if your other taxable income is less than £17,570.
Can I get both?
Yes. You can get the starting rate for savings as well as a Personal Savings Allowance.
Do additional rate taxpayers get any?
No. The Personal Savings Allowance is £0 for additional rate taxpayers.