By amount saved
£100,000 in savings: tax on the interest, protection and the road into ISAs
The calculator is set to £100,000 at 4 % and £30,000 of other income, for example a state and private pension together. It shows the tax in a taxable account and in a cash ISA, both years.
A cash ISA saves you, from April 2027
£660a year
£600 in 2026/27 · interest £4,000 a year
| 2026/27 / 2027/28 | |
|---|---|
| Your allowance on savings | £1,000 / £1,000 |
| Interest at 0 % (allowances) | £1,000 / £1,000 |
| Tax in a taxable account | £600.00 / £660.00 |
| Tax in the cash ISA | £0.00 / £0.00 |
| Interest you keep, taxable account | £3,400 / £3,340 |
Line by line, 2027/28
| Interest at 0 % (allowances) | £1,000 |
| Taxed at 22 % | £3,000 |
| Tax in a taxable account | £660.00 |
| 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.
£100,000 at 4 % earns £4,000 a year, far more than any Personal Savings Allowance. For someone with £30,000 of pension or wages, a basic rate taxpayer, the first £1,000 of interest is tax free and the remaining £3,000 is taxed at 20 % in 2026/27, which is £600. From 6 April 2027 the basic savings rate is 22 %, set by the Finance Act 2026, and the bill becomes £660. A lower pension leaves room in the £5,000 starting rate band and cuts the tax sharply. The whole sum fits under the deposit protection of the Financial Services Compensation Scheme, £120,000 per person per banking licence since 1 December 2025, if it sits with one bank. Moving it all into cash ISAs takes five tax years for a saver aged 65 or more, and eight for one who is 64 or under on each 5 April, because the cash limit falls to £12,000 from 2027/28.
Sums checked by Radif Partners · Editorial policy · How the sums are done
Pension income decides most of the bill
At this size the Personal Savings Allowance covers only a quarter of the interest, so the other layers of tax-free income matter more. A retired saver whose pension leaves part of the Personal Allowance unused, or whose taxable pension is under £5,000, can receive much of the £4,000 at 0 %. The table shows the tax on £4,000 of interest at five pension levels (GOV.UK, how much interest is tax free).
| Pension or other income | At 0 % (Personal Allowance left, starting rate) | Covered by the £1,000 allowance | Tax 2026/27 | Tax 2027/28 |
|---|---|---|---|---|
| £12,570 | £4,000 | £0 | £0.00 | £0.00 |
| £16,000 | £1,570 | £1,000 | £286.00 | £314.60 |
| £20,000 | £0 | £1,000 | £600.00 | £660.00 |
| £30,000 | £0 | £1,000 | £600.00 | £660.00 |
| £45,000 | £0 | £1,000 | £600.00 | £660.00 |
At £12,570 the whole £4,000 falls into the starting rate band and the allowance is not even needed. At £16,000 the starting rate band has shrunk by £3,430 and some interest becomes taxable. From £17,570 upwards the band is gone and only the £1,000 allowance is left. In each taxed case the 2027/28 bill rises by two pence for every taxable pound (Finance Act 2026, section 5). The starting rate page explains that band in detail.
Deposit protection on a six-figure balance
The Financial Services Compensation Scheme protects up to £120,000 of deposits per person per banking licence; the limit rose to that level on 1 December 2025. £100,000 is under it, but interest left to build up takes the balance over the limit within about five years at 4 %. Two trading names can share one licence, so the limit is checked against the licence, not the brand. Premium Bonds and other NS&I products are not covered by the scheme; they are backed by HM Treasury instead.
How many years to move £100,000 into cash ISAs
Under SI 2026/1018, a person who is 64 or under at the end of a tax year can put at most £12,000 into cash ISAs that year from 2027/28, while someone 65 or over keeps £20,000. The table counts tax years from 2026/27, when everyone can still pay £20,000 into cash, and shows the tax on the interest still outside an ISA for someone with £30,000 of other income. Years after 2027/28 use the 2027/28 rules, the latest set by law.
| Tax years used | Under 65: in cash ISAs | Tax on the rest | 65 or over: in cash ISAs | Tax on the rest |
|---|---|---|---|---|
| 1 | £20,000 | £440.00 | £20,000 | £440.00 |
| 2 | £32,000 | £378.40 | £40,000 | £308.00 |
| 3 | £44,000 | £272.80 | £60,000 | £132.00 |
| 4 | £56,000 | £167.20 | £80,000 | £0.00 |
| 5 | £68,000 | £61.60 | £100,000 | £0.00 |
| 6 | £80,000 | £0.00 | £100,000 | £0.00 |
| 7 | £92,000 | £0.00 | £100,000 | £0.00 |
| 8 | £100,000 | £0.00 | £100,000 | £0.00 |
The yearly tax falls quickly once the taxable part drops below £25,000, the amount whose interest the allowance still covers at 4 %. The page for savers over 65 explains how the age test on 5 April works, and the pensioners page covers the interaction with pension income.