By amount saved
£50,000 in savings at the higher rate: the tax, and how long sheltering takes
The calculator opens on £50,000 at 4 % with £55,000 of other income, a higher rate taxpayer. It shows the tax in a taxable account against a cash ISA in 2026/27 and in 2027/28.
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.
At 4 %, £50,000 earns £2,000 of interest a year. Someone with £55,000 of wages or pension is a higher rate taxpayer, so only £500 of that interest is covered by the Personal Savings Allowance (Income Tax Act 2007, section 12B) and the other £1,500 is taxed at 40 % in 2026/27: £600 a year. From 6 April 2027 the higher savings rate becomes 42 % under the Finance Act 2026, and the same interest costs £630. A cash ISA removes that tax, but only up to the yearly limit: £20,000 can go into cash in 2026/27, then £12,000 a year from 2027/28 for anyone 64 or under on 5 April, or £20,000 for those aged 65 or more. Moving a £50,000 balance into cash ISAs therefore takes three or four tax years, and the tax shrinks each year as the taxable part gets smaller.
Sums checked by Radif Partners · Editorial policy · How the sums are done
A timeline, year by year
A sum of this size cannot enter a cash ISA in one go. The table assumes the full yearly cash limit is used at the start of each tax year, with the rest earning 4 % in a taxable account and the interest taken out, not added. It compares a saver who stays 64 or under on each 5 April with one who is already 65 or older. For 2028/29 and 2029/30 it applies the 2027/28 rates and limits, the latest set by law; later rates have not been fixed and may differ.
| Tax year | Under 65: moved | Left taxable | Tax that year | 65+: moved | Left taxable | Tax that year |
|---|---|---|---|---|---|---|
| 2026/27 | £20,000 | £30,000 | £280.00 | £20,000 | £30,000 | £280.00 |
| 2027/28 | £12,000 | £18,000 | £92.40 | £20,000 | £10,000 | £0.00 |
| 2028/29 | £12,000 | £6,000 | £0.00 | £10,000 | £0 | £0.00 |
| 2029/30 | £6,000 | £0 | £0.00 | £0 | £0 | £0.00 |
The under-65 saver needs 4 tax years and pays £372 in total along the way. The saver aged 65 or more needs 3 and pays £280. Leaving everything in a taxable account for the same four years would cost about £2,490 on these assumptions. The gap comes almost entirely from the higher savings rate: at £55,000, each taxable pound beyond the £500 allowance loses 40 % now and 42 % from 6 April 2027 (Finance Act 2026, section 5).
Why the allowance does so little here
For a higher rate taxpayer, £500 of tax-free interest is used up by about £12,500 of savings at 4 %. Everything beyond that is taxed at the full higher savings rate, so the tax on £50,000 grows almost in line with the balance. The starting rate for savings plays no part either, because wages of £55,000 fill the bands below it. That is the main difference from the £100,000 page, where a basic rate pensioner is the example.
Rules that shape the timeline
The yearly cash cap comes from SI 2026/1018. It applies to new subscriptions only; money already in cash ISAs is untouched and can be moved between providers by transfer without using the allowance (GOV.UK, transferring your ISA). The other £8,000 of allowance that an under-65 cannot put into cash from 2027/28 can still go into a stocks and shares ISA, but cash held there will carry a flat 22 % charge on its interest, and transfers from such an ISA to a cash ISA are not allowed for under-65s.
The overall £20,000 allowance is frozen until April 2031. The page on the 2027 cash ISA changes sets out the whole reform, and the 2027/28 rates page shows how the new rates fall on other incomes. The calculator above lets you test another rate, balance or income.