What is a personal savings allowance?
The Personal Savings allowance is an annual allowance that you get each tax year (from the 6th April to 5th April) which is figured out on how much tax you pay. So for example:
- Basic-rate (20%) taxpayers will be able to earn £1,000 interest with no tax.
- Higher-rate (40%) taxpayers will be able to earn £500 interest with no tax.
- Additional-rate (45%) taxpayers do not get an allowance.
For more information, please see the government’s information on the personal savings allowance.