By amount saved
£10,000 in savings: is any of the interest taxed?
The calculator starts with £10,000 at 4 % and £35,000 of other income. Change the three figures to see the tax in a taxable account and in a cash ISA, this year and from 6 April 2027.
A cash ISA saves you, from April 2027
£0a year
£0 in 2026/27 · interest £400 a year
| 2026/27 / 2027/28 | |
|---|---|
| Your allowance on savings | £1,000 / £1,000 |
| Interest at 0 % (allowances) | £400 / £400 |
| Tax in a taxable account | £0.00 / £0.00 |
| Tax in the cash ISA | £0.00 / £0.00 |
| Interest you keep, taxable account | £400 / £400 |
Line by line, 2027/28
| Interest at 0 % (allowances) | £400 |
| Tax in a taxable account | £0.00 |
| Tax in the cash ISA | £0.00 |
A balance of £10,000 earning 4 % produces £400 of interest a year. For most savers that is tax free without any ISA: a basic rate taxpayer has a Personal Savings Allowance of £1,000 and a higher rate taxpayer £500, both above £400 (GOV.UK, how much savings interest is tax free). On the default figures, £35,000 of wages and £10,000 at 4 %, the tax is £0.00 in 2026/27 and £0.00 in 2027/28. The picture changes in three cases: when other accounts already use up the allowance, when the rate is high enough to pass it (above 10 % for a basic rate taxpayer, above 5 % at the higher rate), and for additional rate taxpayers, who have no allowance at all. Someone on £130,000 would pay £188.00 on the same £400 in 2027/28, which a cash ISA would avoid.
Sums checked by Radif Partners · Editorial policy · How the sums are done
The allowance covers all your interest, not each account
A common mistake is to look at one account in isolation. The Personal Savings Allowance is a single amount per person for the tax year, set by section 12B of the Income Tax Act 2007. Interest from a current account, an easy access account, a fixed-rate bond and your share of a joint account all count against it. So £10,000 that looks safe alone may be the account that tips you over.
The table adds the £400 from £10,000 at 4 % on top of interest already received from other taxable accounts, and shows the extra tax it causes in 2027/28, for three incomes.
| Other interest already received | Tax on the £400, income £35,000 | Income £60,000 | Income £130,000 |
|---|---|---|---|
| £0 | £0.00 | £0.00 | £188.00 |
| £400 | £0.00 | £126.00 | £188.00 |
| £800 | £44.00 | £168.00 | £188.00 |
| £1,500 | £88.00 | £168.00 | £188.00 |
At £35,000 nothing is due until the other accounts pass £600. At £60,000 the room is only £100, so a second account of a similar size is enough to create a bill. At £130,000 every pound of interest is taxed at 47 %, whatever the other accounts hold.
How much interest is tax free at your income
The second table turns the rules round: it shows the largest amount of interest a person can receive in 2027/28 with no tax, and the rate on £10,000 that would produce it. Low incomes gain from the Personal Allowance and the £5,000 starting rate; higher ones only from the allowance.
| Other income | Interest tax free | Rate on £10,000 to reach it |
|---|---|---|
| £20,000 | £1,000 | 10.0 % |
| £35,000 | £1,000 | 10.0 % |
| £60,000 | £500 | 5.0 % |
| £130,000 | £0 | 0.0 % |
What the 2027/28 rates change at this size
From 6 April 2027 savings rates rise to 22 %, 42 % and 47 % (Finance Act 2026, section 5), but the allowances stay the same. For a £10,000 balance that means no change for anyone whose interest stays inside the allowance, and two pence more per taxable pound for the rest. In practice the added cost at this size is a few pounds a year at most, except for additional rate taxpayers.
When the rate matters more than the wrapper
At £10,000, a difference of half a point in the rate is worth £50 a year, which is more than the tax most savers would ever pay on this balance. For a basic rate taxpayer with no other savings, a taxable account at 4.5 % leaves more after tax than a cash ISA at 4 %, because the allowance covers both. The comparison can flip only once the interest passes the allowance, and the calculator shows where that point sits for your income.
The calculator above uses your own figures and shows the same comparison year by year. How interest on an account held with someone else is split between the holders is set out on the joint account page. For a larger sum, see the £20,000 page, and for the full rules on the allowance, the Personal Savings Allowance page.