Stressed by tax?
Get Earnr Pro

Personal Savings Allowance

[ˈpɜːsᵊnᵊl ˈseɪvɪŋz əˈlaʊəns]



Personal Savings Allowance is the amount of interest earned from savings, bonds, or peer-to-peer loans that is tax-free, and it depends on your Income Tax band.

More detail:

The Personal Savings Allowance is a scheme in the United Kingdom that allows eligible individuals to earn some interest from savings accounts, bond or Peer-to-peer loans tax-free.

This allowance does not apply to interest from Individual Savings Accounts as this interest is always tax-free.

The amount of allowance available depends on an individual's Income Tax band. For the 2023/24 Tax Year, Basic Rate taxpayers get £1000 of tax-free savings allowance. Higher Rate taxpayers get £500 while Additional Rate taxpayers get no Personal Savings Allowance.

If you are an Employee and earn more interest than the Personal Savings Allowance, HMRC will change your Tax Code and take the tax owed automatically. If you are Self-employed and earn more interest than your tax-free allowance, you must include this information in your Self Assessment.

Back to Taxionary

You might also like...

decorative image for a blog

What is IR35 and do I need to worry about it?

There are loads of different tax laws in the United Kingdom. IR35 is very important to freelancers and contractors but can be a little confusing. Here, we explain simply what IR35 is and who it can affect.

Read more
decorative image for a blog

Flat rates for mileage vs actual expenses. What is better?

Self-employed individuals can use two different methods to expense business vehicle costs. Here, we investigate the positive and negatives for both methods and which one might be right for you.

Read more
decorative image for a blog

What is the EIS and how does it work?

If you are looking to invest in small and medium sized businesses, the Enterprise Investment Scheme (EIS) provides lots of tax reliefs for doing so. Here we discuss what it is and how it works.

Read more
Earnr logoDownload earnr