Answers · UK 2025/26
What is the starting rate for savings in the UK?
The starting rate for savings is 0% on up to £5,000 of savings interest. It applies only if your non-savings income (wages, pension) is below £17,570 -- the personal allowance of £12,570 plus the £5,000 starting rate band. It reduces by £1 for every £1 of non-savings income above £12,570.
Full answer
The starting rate for savings is a 0% income tax rate that applies to savings interest for people with low non-savings income. The key figures for 2026/27: - Starting rate band: £5,000 - Rate: 0% - Available when non-savings income is below £17,570 (personal allowance £12,570 + starting rate band £5,000) How it works: - Non-savings income includes employment income, self-employment profits, pension income, and rental income. - If your non-savings income is £12,570 or less (i.e., within or below your personal allowance), the full £5,000 starting rate band is available for savings interest. - If your non-savings income exceeds £12,570, the starting rate band reduces by £1 for every £1 above the personal allowance. - If your non-savings income is £17,570 or above, the starting rate band is nil. Example: - Pensioner with £14,000 state pension (non-savings income). PA is £12,570. Non-savings income above PA: £1,430. Starting rate band remaining: £5,000 - £1,430 = £3,570 at 0%. - If the same person has £3,000 of savings interest, all of it falls within the £3,570 remaining starting rate band -- taxed at 0%. On top of the starting rate band: - The Personal Savings Allowance (PSA) is available in addition. Basic-rate taxpayers get £1,000 PSA; higher-rate taxpayers get £500; additional-rate taxpayers get £0. - So a basic-rate taxpayer with low income could potentially receive up to £6,000 of savings interest tax-free (£5,000 starting rate + £1,000 PSA) before paying any tax. Relevance: - Particularly valuable for people with modest pensions or part-time income who have accumulated savings.
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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.