Starting Rate for Savings Calculator 2026
Calculate if you qualify for the 0% starting rate for savings. Available if non-savings income is below £17,570. Can earn up to £5,000 savings interest tax-free in addition to the Personal Savings Allowance.
Starting Rate for Savings Calculator
The starting rate for savings lets low-income individuals earn up to £5,000 of savings interest at 0% tax. It's reduced by £1 for every £1 of non-savings income above the personal allowance (£12,570).
Frequently Asked Questions
What is the starting rate for savings?
The starting rate for savings is a 0% tax rate on up to £5,000 of savings interest. It applies if your non-savings income (wages, pension, rental) is less than £17,570 (personal allowance + starting rate band).
How is the starting rate reduced?
The £5,000 starting rate band is reduced by £1 for every £1 of non-savings income above the personal allowance (£12,570). If non-savings income is £17,570 or more, none of the starting rate band is available.
Who benefits from the starting rate for savings?
Mainly: retirees with small pensions and significant savings interest, part-time workers, people with rental income below £17,570, and those between jobs. People with only savings income and no employment income can benefit most.
Is the starting rate in addition to the Personal Savings Allowance?
Yes — the starting rate (up to £5,000 at 0%) and the PSA (£1,000 for basic rate, £500 for higher rate) are separate allowances. A non-taxpayer could potentially earn £5,000 (starting rate) + £1,000 (PSA) + £12,570 (personal allowance) = £18,570 before any tax.
Does ISA interest count toward the starting rate band?
No — ISA interest is always tax-free and does not count toward any savings allowances or bands. Only non-ISA savings interest (bank accounts, building societies, fixed-rate bonds, P2P lending) counts.
How do I claim the starting rate?
If you have not been taxed on savings interest (because your bank did not deduct tax), you don't need to do anything if you're within your allowances. If excess tax was deducted (before 2016 banks withheld 20%), you can reclaim using form R40 or R85.
What happens if my income increases above £17,570?
If your non-savings income exceeds £17,570, the starting rate band for savings is completely used up. You still have the Personal Savings Allowance (£1,000 basic rate, £500 higher rate). Savings interest above this is taxed at your marginal rate.
Can pensioners use the starting rate?
Yes — many retired people with State Pension plus small private pension income can still qualify. If total non-savings income is between £12,570 and £17,570, a partial starting rate applies. Many pensioners are unaware of this and pay unnecessary tax on savings.