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PSA Info

Personal Savings Allowance

PSA Info

On 6 April 2016, the Government introduced the Personal Savings Allowance. This allows you to earn interest on your savings and current account balance tax free, up to a certain amount.

  • Basic rate tax-payer can earn £1,000 interest tax free
  • Higher rate tax-payer can earn £500 interest tax free

What this means for you?

How much will your allowance be?

The table shows your allowance from 6 April 2016, depending on whether you’re a basic, higher or additional rate taxpayer.

Tax rateIncome band (adjusted net income)Personal Savings Allowance
Basic 20%Up to £43,000Up to £1,000 in savings income is tax-free
Higher 40%£43,001 - £150,000Up to £500 in savings income is tax-free
Additional 45%Over £150,000No Personal Savings Allowance

Important Information

Allowance Limit

If you exceed your Personal Savings Allowance you may still need to pay tax on the interest you earn. HMRC will normally collect this by changing your tax code.

The current tax rules are subject to change by HM Revenue & Customs and the value of tax benefits depends on individual circumstances.

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