Personal Savings Allowance Calculator — Tax on Savings Interest (2026/27)

Savings interest has three separate tax-free layers before a single pound of it is taxed at your normal rate — and, for anyone in Scotland, a genuine surprise: none of those three layers use the Scottish rates at all. This calculator works through all three in order — the starting rate for savings, your Personal Savings Allowance, and any unused personal allowance — then the tax on whatever savings interest and dividends are left, and how much more interest you could earn before any of it is taxed.

The three layers, in the order HMRC applies them

Income is taxed in a fixed order: non-savings income (salary, pension, rental profit) first, then savings interest, then dividends last — dividends are legally “the highest part” of your income and savings interest sits just below them (Income Tax Act 2007, s.16(5)). That ordering decides which allowance mops up which pound:

• Personal Allowance (£12,570). Used against your salary and rental profit first. Only whatever is left over — usually nothing, once salary passes £12,570 — reduces savings interest, then dividends.
• Starting rate for savings (up to £5,000 at 0%). This is not extra on top of the Personal Allowance — it shrinks £1 for every £1 that your salary and rental profit (after the Personal Allowance) exceed nil, and disappears completely once that non-savings income reaches £17,570. Most people with a full-time salary never see this allowance at all.
• Personal Savings Allowance. £1,000 if you’re a basic-rate taxpayer, £500 higher-rate, £0 additional-rate — and gov.uk is explicit that this is worked out by “adding all your income together”, savings interest and dividends included. That means dividends alone can tip you from the £1,000 allowance to the £500 one, even if your salary and savings interest on their own would have kept you comfortably in the basic-rate band — this calculator’s Scotland example below is built around exactly that.

The Scotland surprise

Scotland sets its own rates for salaries and pensions — six bands from 19% to 48% — but gov.uk says it plainly for savings and dividends: “You’ll pay the same tax as the rest of the UK on dividends and savings interest.” The legislation backs this up directly: section 11A of the Income Tax Act 2007 charges Scottish rates only on a Scottish taxpayer’s non-savings income. So the starting rate for savings, the Personal Savings Allowance, and the rate charged on savings interest and dividends above those allowances are worked out using the same £37,700 / £125,140 rest-of-UK limits (on taxable income) whether you live in Manchester or Motherwell. Only the tax on the salary and rental profit itself changes in Scotland — shown separately below.

What this calculator does with your numbers

Enter your salary and rental profit (this fills the Personal Allowance and the basic-rate band first), then your taxable savings interest and dividends. The calculator works out how much of the £5,000 starting rate survives, which Personal Savings Allowance band you land in once everything is added together, the tax on whatever savings interest and dividends are left after both, and — useful for deciding whether to top up a Cash ISA — how much more interest you could earn before any tax starts at all. On a £30,000 salary with £2,000 of savings interest and nothing else, for example: the salary alone (£30,000, well above £17,570) uses up the entire Personal Allowance and wipes out the starting rate for savings completely, leaving only the standard £1,000 basic-rate Personal Savings Allowance to cover the interest — the first £1,000 tax-free, the remaining £1,000 taxed at 20%, so £200 of tax on the interest in total.

Cash ISA or not?

A Cash ISA pays interest completely tax-free, for life, with no allowance to use up — you can hold up to £20,000 across all your ISAs in the 2026/27 tax year. Once your starting rate for savings and Personal Savings Allowance are both used up, every extra pound of interest in an ordinary account is taxed at your marginal rate — 20%, 40% or 45% — while the same pound in a Cash ISA is not. The calculator shows your own marginal rate on the next pound of interest, so you can see exactly what a Cash ISA would be protecting for you specifically, rather than relying on a generic rule of thumb.

Where this fits with the rest of your tax

This page focuses on savings interest and dividends specifically. For the full picture across salary, self-employment, rent, pension and dividends together, see the income tax calculator; for dividends on their own in more depth, the dividend tax calculator; for what actually lands in your account each month, the take-home pay calculator; and for the rental profit itself — expenses, mortgage interest and the Section 24 credit — the rental income tax calculator.

Starting rate for savings and Personal Savings Allowance amounts: gov.uk, “Apply for tax-free interest on savings”, read 13 September 2026. Scottish treatment of savings and dividend income: gov.uk, “Scottish Income Tax”, and Income Tax Act 2007, sections 11A and 16(5), legislation.gov.uk, read 13 September 2026. ISA allowance: gov.uk, “Individual Savings Accounts (ISAs)”, read 13 September 2026. Personal Allowance, its taper, the rest-of-UK and Scottish income tax bands, and the dividend allowance and rates: this site’s taxdata.py, verified against gov.uk 29 August 2026. General information for the whole UK, not advice — your own Personal Savings Allowance depends on your total income for the year, which HMRC confirms only after it ends.