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Glossary · Tax

Starting rate for savings

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By the Money Guide editorial team · Editorial responsibility: Kaiser Khan, Editorial Director · How we check facts

Definition: Up to £5,000 of savings interest is taxed at 0% — but the band is reduced by £1 for every £1 of non-savings income above the £12,570 Personal Allowance.

Disappears entirely once non-savings income reaches £17,570. Most useful for people with low earnings, low pensions or in a gap year. Sits alongside the Personal Savings Allowance.

Primary source: gov.uk/apply-tax-free-interest-on-savings

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