Glossary · UK
What is Starting Rate for Savings?
A 0% band of up to £5,000 on savings interest, available to people with low non-savings income.
Full Definition
The starting rate for savings is a 0% tax band of up to £5,000 that applies to savings interest, on top of the Personal Allowance and the Personal Savings Allowance. For 2026/27 it remains £5,000, but it is reduced £1 for every £1 of non-savings income (such as wages or pension) above the £12,570 Personal Allowance. This means once your non-savings income reaches £17,570 the starting rate is fully tapered away to nil. It mainly benefits people with little earned income but significant savings — for example early retirees or those living off interest. Combined with the £12,570 allowance and £1,000 Personal Savings Allowance, a person with no other income could in theory receive up to £18,570 of interest tax-free.