Answers · UK 2025/26
What is the Personal Savings Allowance in the UK for 2026/27?
The Personal Savings Allowance (PSA) for 2026/27 is £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers, and nil for additional-rate taxpayers (income above £125,140). Interest within the PSA is tax-free; above it is taxed at your marginal rate.
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The Personal Savings Allowance was introduced in April 2016 and allows most savers to earn interest tax-free up to a threshold. For 2026/27: basic-rate taxpayers (income up to £50,270) receive a £1,000 PSA; higher-rate taxpayers (income £50,271–£125,140) receive £500; additional-rate taxpayers (income above £125,140) receive no PSA at all. Interest earned above the PSA is taxed at your marginal Income Tax rate — 20%, 40% or 45%. Banks and building societies pay interest gross (without deducting tax). If your savings interest exceeds your PSA, you report it via Self Assessment or HMRC may adjust your PAYE tax code. ISA interest does not count toward the PSA — it's always tax-free. The PSA sits alongside the Starting Rate for Savings (up to £5,000 at 0% for those with non-savings income below £17,570), which provides an additional tax-free savings band for those with low earnings. With savings rates in 2026 around 4–5% for easy-access accounts, someone holding £25,000 in a savings account earning 4.5% generates £1,125 interest — just over the basic-rate PSA. Regular review of where savings are held — ISA vs savings account — is therefore worthwhile.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.