Answers · UK 2025/26

What is the starting rate for savings and who qualifies in 2026/27?

The starting rate for savings lets you earn up to GBP 5,000 of savings interest at 0% in 2026/27. It only helps people with low non-savings income: every GBP 1 of non-savings income above the GBP 12,570 Personal Allowance reduces the GBP 5,000 band by GBP 1.

Last updated: 10 June 2026Last reviewed: 10 June 2026How we verify

Full answer

The starting rate for savings is a 0% band of up to GBP 5,000 that sits on top of the Personal Allowance and applies only to savings interest. It is aimed at people whose wages or pension are low, so they can receive more interest tax-free. Crucially, it tapers: for every GBP 1 of non-savings income (salary, pension, self-employment profit, rent) above the GBP 12,570 Personal Allowance, the GBP 5,000 band shrinks by GBP 1. Once non-savings income reaches GBP 17,570, the starting rate is fully gone. Worked example: Tom is retired with a private pension of GBP 15,000 and GBP 6,000 of savings interest. His non-savings income exceeds the GBP 12,570 allowance by GBP 2,430, so his starting-rate band falls from GBP 5,000 to GBP 2,570. That GBP 2,570 of interest is taxed at 0%. He then uses his Personal Savings Allowance of GBP 1,000 (he is a basic-rate taxpayer), making a further GBP 1,000 tax-free. The remaining GBP 2,430 of interest is taxed at 20%, costing GBP 486. By contrast, someone with a GBP 30,000 salary gets no starting-rate band at all, because their non-savings income is well above GBP 17,570. The starting rate is therefore most valuable for early retirees, low earners and those living off savings. Use the income-tax calculator to model how your pension or wages interact with the starting rate and Personal Savings Allowance. For HMRC's exact ordering rules and edge cases, see gov.uk.