What is the starting rate for savings?

Full answer

The starting rate for savings is a 0% tax rate on up to £5,000 of savings income (bank interest, building society interest, NS&I interest), available to those with low non-savings income. **2026/27 figures:** - Maximum starting rate band: **£5,000** - Tax rate: **0%** - Non-savings income threshold: **£17,570** (= £12,570 PA + £5,000 starting rate band) **How it works:** The starting rate band is progressively reduced by £1 for every £1 of non-savings income (salary, self-employment profits, pension) that exceeds the Personal Allowance (£12,570). **Examples:** | Non-savings income | Starting rate band available | |---|---| | £10,000 (below PA) | Full £5,000 | | £12,570 (exactly PA) | Full £5,000 | | £15,570 | £5,000 − £3,000 = **£2,000** | | £17,570 or above | **£0** — no starting rate available | **Who benefits most:** - Retirees with a modest State Pension and savings interest - People who have stopped work mid-year - Low earners with significant savings **Stacking with the Personal Savings Allowance (PSA):** The starting rate is separate from — and stacks with — the PSA (£1,000 for basic-rate, £500 for higher-rate taxpayers). A low earner could potentially earn: - £5,000 savings interest at 0% (starting rate) - Plus £1,000 savings interest at 0% (PSA) - Plus unlimited ISA interest at 0% **Note:** Savings income is the last slice of income for tax purposes — non-savings income (salary etc.) is calculated first, which determines how much starting rate band remains.

Try the calculator

Related guides

• Uk Tax On Savings And Investments 2026