Personal Savings Allowance Calculator 2026

The Personal Savings Allowance (PSA) allows you to earn interest on savings tax-free. Basic rate taxpayers: £1,000/year. Higher rate taxpayers: £500/year. Additional rate taxpayers (income over £125,140): £0 (no allowance).

No — ISA interest is always tax-free and never uses your PSA. The PSA covers non-ISA savings accounts, current account interest, fixed-rate bonds, peer-to-peer lending returns, and NS&I Premium Bond prizes.

If your non-savings income is below £17,570 (personal allowance £12,570 + starting rate band £5,000), you can earn up to £5,000 of savings interest at 0%. This is on top of the PSA and is useful for low-income or retired savers.

If your savings interest exceeds your PSA, you must declare it. Banks now report interest directly to HMRC. If you are a PAYE employee and owe tax on savings, HMRC may adjust your tax code. Otherwise, you need a self-assessment return.

No — NS&I Premium Bond prizes are tax-free and do not count toward the PSA or any savings interest threshold. They are completely outside the tax system.

The PSA rates have not changed since it was introduced in April 2016 (basic £1,000, higher £500). However, with savings rates at 4-5%, many more savers are now exceeding their PSA and owe tax than in previous years.

UK banks and building societies automatically report annual interest paid to HMRC. HMRC uses this data to check if your tax code should be adjusted or if you need a self-assessment return. You can see reported interest in your Personal Tax Account.

Yes — both you and your spouse/civil partner each have a separate PSA. Putting savings in the name of the lower-income partner (with a higher or full £1,000 PSA) can reduce the family's overall savings tax liability.