What is my Personal Savings Allowance?
If you’re a UK basic-rate taxpayer, up to £1,000 of interest on your savings income is now tax-free. And if you’re a higher rate taxpayer, up to £500 is tax-free.
Your Personal Savings Allowance (PSA) is the total amount of interest you can earn each year across all of your bank accounts (except ISAs) without paying tax.
It covers interest you earn from all of your accounts (except ISAs) with all banks and building societies – not just us. The amount of tax-free interest you can earn depends on how much income tax you pay each year.
From 6 April 2016, it’s £1,000 tax-free interest for basic rate taxpayers and £500 tax-free interest for higher rate taxpayers. Additional rate taxpayers don’t have a PSA.
If you earn more in interest than your PSA, you’ll need to make sure you pay the tax that’s due to HMRC (or other tax authority). Go to HMRC’s site to find out how to do this.