Tax on savings interest
Make the most of your interest and understand how tax works.
Interest from cash ISAs
Cash ISAs are tax-free. So you don't need to pay any tax on the interest earned. Bear in mind you can only save in one cash ISA in a tax year and there are limits on how much you can save.
Interest from other savings accounts
Most people don’t need to pay tax on their interest from non-ISA savings accounts. This is because of the Personal Savings Allowance.
The Personal Savings Allowance
The PSA is an allowance for how much interest you can earn from non-ISA savings accounts before you have to pay any tax on it. Whether you get a PSA depends on your tax status.
- Basic rate taxpayers can earn up to £1,000 of interest tax-free each tax year.
- If you're a higher rate taxpayer you get a £500 allowance.
- Additional rate taxpayers don't get a PSA.
There are other allowances that may affect how much tax you need to pay. You can find out more on the Government website.
Our cash ISAs
Make the most of tax-free interest with a cash ISA.
We have a range of savings guidance to help you.