2026/27 rules
- Starting rate for savings: up to £5,000 of interest at 0%, reduced by non-savings income above the personal allowance.
- Personal Savings Allowance: £1,000 (basic), £500 (higher), £0 (additional rate).
- Interest in ISAs is always tax-free.
FAQ
Do I pay tax on £2,400 of interest on a £35,000 salary?
£280: £1,400 above the £1,000 allowance at 20%.
Sources (checked 6 Nov 2026): HMRC tax on savings interest; Autumn Budget 2025 (savings rates from April 2027).