ISA or taxable account: the tax on your interest, 2026/27 and 2027/28
Enter your income, your savings and the rate. You get the tax you would pay on that interest outside an ISA this year and from 6 April 2027, line by line.
A cash ISA saves you, from April 2027
£630a year
£600 in 2026/27 · interest £2,000 a year
| 2026/27 / 2027/28 | |
|---|---|
| Your allowance on savings | £500 / £500 |
| Interest at 0 % (allowances) | £500 / £500 |
| Tax in a taxable account | £600.00 / £630.00 |
| Tax in the cash ISA | £0.00 / £0.00 |
| Interest you keep, taxable account | £1,400 / £1,370 |
Line by line, 2027/28
| Interest at 0 % (allowances) | £500 |
| Taxed at 42 % | £1,500 |
| Tax in a taxable account | £630.00 |
| Tax in the cash ISA | £0.00 |
From 6 April 2027 you can pay at most £12,000 a year into cash ISAs if you are 64 or under on 5 April 2028; money already inside stays tax free.
Rules of 2026/27 and 2027/28 as set by the Finance Act 2026 and SI 2026/1018 · last updated · Radif Partners · How the sums are done · About this site
This site does better than the first Google result, GOV.UK's page on Individual Savings Accounts, which gives the £20,000 allowance for 2026/27 but no figure for the tax an ISA saves, because it works out that tax for your own income: the same balance at the same rate in a taxable account and in an ISA, with the Personal Allowance, the £5,000 starting rate for savings and the Personal Savings Allowance applied in the order the law sets, for 2026/27 and again for 2027/28, when the savings rates rise to 22 %, 42 % and 47 % and the cash ISA limit falls to £12,000 for savers under 65. Banks and platforms explain the allowance; none of the pages that rank shows what the ISA is worth to a particular saver. Nothing is sold here and no account is ranked: the only number that matters is your own.
What an ISA saves a year, by income and balance
Tax you would pay on the interest in a taxable account, which is what a cash ISA saves you. Interest at 4 % a year, no other savings, rest of the UK. Two figures per balance: 2026/27, then 2027/28.
| Income before tax | £20,000 · 2026/27 | £20,000 · 2027/28 | £50,000 · 2026/27 | £50,000 · 2027/28 | £100,000 · 2026/27 | £100,000 · 2027/28 |
|---|---|---|---|---|---|---|
| £16,000 | £0 | £0 | £0 | £0 | £286 | £315 |
| £35,000 | £0 | £0 | £200 | £220 | £600 | £660 |
| £52,000 | £120 | £126 | £600 | £630 | £1,400 | £1,470 |
| £75,000 | £120 | £126 | £600 | £630 | £1,400 | £1,470 |
| £110,000 | £280 | £286 | £1,000 | £1,030 | £2,200 | £2,270 |
| £150,000 | £360 | £376 | £900 | £940 | £1,800 | £1,880 |
Four layers of tax-free interest, in a fixed order
Most savers in the UK pay no tax on their interest, and the reason is not one allowance but four, applied one after the other. The calculator follows the order of the Income Tax Act 2007, because the order changes the answer.
- What is left of your Personal Allowance. £12,570, used first by wages and pensions. Only people whose other income is below it have any left for interest.
- The starting rate for savings. Up to £5,000 of interest at 0 %, but only inside the lowest £5,000 of taxable income. Each pound of other income above the Personal Allowance removes a pound of it, so it disappears at £17,570 of income. Frozen at £5,000 until 2030/31 by section 9 of the Finance Act 2026.
- The Personal Savings Allowance. £1,000 if your total income stays in the basic rate band, £500 if it reaches the higher rate, nothing at the additional rate. The interest itself counts when your band is decided.
- The rate of your band. 20 %, 40 % or 45 % in 2026/27; 22 %, 42 % or 47 % in 2027/28.
Two examples show how far apart savers are. A retired saver with £16,000 of pension and £100,000 earning 4 % pays £286.00 on £4,000 of interest, because the starting rate and the allowance absorb most of it. A worker on £52,000 with half that balance pays £600.00 this year and £630.00 in 2027/28: the interest pushes the total over the higher rate threshold, which halves the allowance. At 4 %, a basic rate taxpayer can hold about £25,000 in taxable accounts before paying anything, a higher rate taxpayer about £12,500.
The road to 6 April 2027
Budget: cash ISA limit of £12,000 for under-65s and savings rates up 2 points, both from April 2027, announced.
Finance Act 2026 receives Royal Assent: savings rates of 22, 42 and 47 % for 2027/28 become law.
Consultation on a First Time Buyer ISA to replace the Lifetime ISA for new savers; it closed on 18 August 2026.
ISA (Amendment) (No. 2) Regulations 2026 made: the £12,000 cash limit, the transfer ban and the charge on cash in investment ISAs.
Both changes take effect on the first day of the 2027/28 tax year.
What is already law, and what is still to come
Everything the calculator uses for 2027/28 is in force law that starts on 6 April 2027: the savings rates are in section 5 of the Finance Act 2026, the frozen Personal Allowance and basic rate band in section 10, and the ISA changes in the Individual Savings Account (Amendment) (No. 2) Regulations 2026, made on 10 September 2026 and laid before Parliament on 14 September 2026. Two things are not settled. The main rates of income tax on wages for 2027/28 will be set by next year's Finance Act; they only matter here for someone whose interest tapers their Personal Allowance, and the calculator says when it uses this year's rates for that. The Scottish rates for 2027/28 will be set in the Scottish Budget, expected early in 2027. And the First Time Buyer ISA has been consulted on but has no launch date or price cap yet; until it opens, the Lifetime ISA stays open on its current rules.
The ISA changes are detailed on the cash ISA changes page, with the age test on the page for savers aged 65 and over. The rates are on the 2027/28 savings tax page.
Premium Bonds, by the same arithmetic
Premium Bonds pay no interest. Each £1 Bond has a 1 in 21,000 chance a month of a tax-free prize, and the prizes add up to a prize fund rate of 4.35 % as published by NS&I for the October 2026 draw. That is an average: two £1 million prizes a month pull it up, and most holders get less. Simulating 4,000 years of draws on the October 2026 prize table, £25,000 of Bonds wins a median of £925 a year against an average of £1,087. The Premium Bonds calculator sets this against a taxable account after tax for your income, and the odds page gives the chances month by month.
Where the figures come from
Rates, bands and allowances come from legislation.gov.uk and GOV.UK: the Income Tax Act 2007 as amended, the Finance Act 2026, the ISA regulations and HMRC's guidance on tax-free interest. Prizes come from NS&I's monthly prize allocation. The parameter file cites 47 official pages, each read on 19 October 2026, and the engine is tested against GOV.UK's own worked examples. The method page lists every rule and what is left out; the about page says who publishes the site and how to report an error.
What the calculator does not do: dividends, foreign interest, the Marriage Allowance and the Blind Person's Allowance are left out, and it assumes interest is paid in the year you choose. It never sees your accounts and nothing you type leaves your browser. It is not advice and it recommends no provider.
Every calculator and guide
Tax on interest
- Tax on savings interestWhat a year of interest costs in tax at your income, now and at the 2027/28 rates.
- Personal Savings AllowanceWhich of the £1,000, £500 or nil allowances applies to you, and the balance it covers at your rate.
- Starting rate for savingsThe £5,000 band of interest taxed at 0 %, and how much of it your other income leaves you.
- Savings tax rates 2027/28The 22 %, 42 % and 47 % savings rates from 6 April 2027, and the extra tax they mean at your income.
- Savings interest and your tax codeHow HMRC collects the tax on interest: tax code, Simple Assessment or Self Assessment, and when.
- Tax on fixed rate bondsWhen bond interest is taxed, and what a maturity date either side of 6 April 2027 does to the bill.
- Joint account interestHow interest on a joint account is split between holders, and how each half meets its own allowances.
- Savings tax in ScotlandWhy a Scottish taxpayer’s interest is taxed at UK rates and bands, even when their pay is not.
- Savings income over £100,000How interest above £100,000 of income shrinks the Personal Allowance and raises the tax on your pay.
- Savings tax for pensionersState Pension, private pension and interest: how much retired savers can earn before any tax.
- Reclaim tax on savingsTax on interest collected twice or on a wrong estimate: how it is put right this year and for past years.
ISA rules
- ISA allowanceHow much of the £20,000 you have used this year, and how much of it can still go into cash.
- Cash ISA limitYour cash ISA ceiling in 2026/27 and 2027/28 from your year of birth, and the cash that will not fit.
- Cash ISA changes 2027The whole April 2027 reform in one place: dates, the £12,000 ceiling, the transfer ban, the 22 % charge.
- ISAs over 65Whether your date of birth keeps the £20,000 cash ISA limit in 2027/28, and from which year.
- Flexible ISAHow much you can still pay in after a withdrawal, with and without the flexible rule.
- ISA transferWhat moving an ISA to a better rate is worth, how long it should take, and the 2027 limits.
- Cash in a stocks and shares ISAThe 22 % charge on interest earned by cash inside an investment ISA from April 2027.
- Inheriting an ISAThe extra ISA allowance a widow, widower or surviving civil partner receives, and the deadlines.
Lifetime ISA
- Lifetime ISAThe 25 % bonus year by year, the ages that open and close the account, and what the pot can reach.
- Lifetime ISA withdrawal chargeWhy the 25 % charge costs more than the bonus, and how much to take out to get the cash you need.
- Lifetime ISA house price limitThe £450,000 cap, the 12 month wait, the conveyancer and the 90 day window, and what happens over the limit.
- Lifetime ISA for retirementPayments until 50, free access at 60, and how the bonus compares with pension tax relief in broad terms.
Children
- Junior ISAThe £9,000 yearly limit, who can open and pay into the account, and what regular payments grow to by 18.
- Tax on children’s savingsThe £100 rule on money from a parent, why grandparents’ gifts are different, and the child’s own allowances.
- Junior ISA at 18What changes at 16 and at 18, what happens to Child Trust Funds, and the cash ISA limit a young adult meets from 2027.
Premium Bonds
- Premium Bonds calculatorTypical prizes for your holding, the spread from a lean year to a lucky one, and a taxed account beside them.
- Premium Bonds oddsYour chance of at least one prize this month and this year, and the odds behind each prize value.
- Premium Bonds prize rateWhat the 4.35 % prize fund rate means, and the taxable interest rate that would match it in your band.
By amount saved
- £10,000 of savingsTax on the interest from £10,000, and the few cases where a cash ISA changes the bill.
- £20,000 of savingsOne full ISA allowance in cash: what fits in 2026/27, what fits from 2027/28 and what the rest costs in tax.
- £50,000 of savingsA higher rate taxpayer with £50,000: the yearly tax on the interest and how many tax years it takes to shelter it.
- £100,000 of savingsA basic rate saver or pensioner with £100,000: tax on £4,000 of interest, the FSCS limit and the years needed to reach ISAs.
Questions savers ask
Is a cash ISA worth it if I pay no tax on my interest?
Not for the tax, today. A basic rate taxpayer can earn £1,000 of interest tax free, which at 4 % covers about £25,000 of savings. A cash ISA still keeps future interest out of tax if rates, balances or your income rise, and the 2027/28 rates make every taxable pound above the allowance cost more. If a taxable account pays clearly more than the best cash ISA, it can be the better home for money under that level.
What is the ISA allowance for 2026/27 and 2027/28?
£20,000 in each year, split as you like between cash, stocks and shares, innovative finance and a Lifetime ISA, which takes £4,000 at most. From 6 April 2027 no more than £12,000 of it can go into cash ISAs if you are 64 or under on 5 April 2028; savers aged 65 or over keep £20,000 in cash. The Budget of November 2025 froze the overall limits until April 2031.
Do I lose my ISA if the cash limit falls to £12,000?
No. Money already in a cash ISA stays there and stays tax free; the new limit only caps what you pay in during a tax year. What changes for under-65s is that transfers from a stocks and shares ISA into a cash ISA will be refused, and cash left inside an investment ISA will bear a 22 % charge on its interest.
How much tax will I pay on savings interest from April 2027?
Only on interest above your allowances, at 22 %, 42 % or 47 % instead of 20, 40 or 45 %. The Personal Allowance, the £5,000 starting rate and the Personal Savings Allowance are unchanged, so a saver who pays nothing now still pays nothing. Someone on £52,000 with £50,000 at 4 % goes from £600.00 to £630.00.
Are Premium Bonds better than a savings account?
It depends on your tax band and on luck. Prizes are tax free and the prize fund rate is 4.35 %, but that is an average pulled up by rare large prizes. On £25,000 the median holder wins about £925 a year. For a higher rate taxpayer that equals a taxable account paying 4.93 % in 2027/28; a basic rate taxpayer needs much less, so for most people a good account wins.
Does this calculator work for Scotland?
Yes. Savings interest is taxed at UK rates and on UK bands even for Scottish taxpayers, and the Personal Savings Allowance follows the UK higher rate threshold, so the tax on your interest is the same as elsewhere. The only Scottish part is the extra tax on wages when interest tapers the Personal Allowance above £100,000; choose Scotland under "More" for that.
Worked out by Radif Partners
Independent publisher of ISA and savings tax calculators for the United Kingdom
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Tax year 2026/27 (6 April 2026 to 5 April 2027), with the 2027/28 rules already in law, rules last read on . Worked out from the rules in law on the date shown; not financial advice, and no product is recommended.