How much can I save before paying tax?
For the 2026/27 tax year · checked 22 Sep 2026 against GOV.UK
At a 4% interest rate, a basic-rate taxpayer can hold about £25,000 outside an ISA before paying any tax on the interest. A higher-rate taxpayer can hold about £12,500.
There's no limit on how much you can save. The limit is on how much interest you can earn tax-free, so the balance depends on your interest rate.
Savings you can hold before paying tax
| Interest rate | Basic rate (£1,000 allowance) | Higher rate (£500 allowance) |
|---|---|---|
| 3% | £33,300 | £16,600 |
| 4% | £25,000 | £12,500 |
| 5% | £20,000 | £10,000 |
Additional-rate taxpayers (income over £125,140) have no allowance, so they pay tax on all interest outside an ISA.
Check your own savingsIf your other income is low
If your income apart from interest is under £17,570, you can also use the starting rate for savings: up to £5,000 more interest tax-free. With income of £12,570 or less, you can earn up to £6,000 of interest tax-free, which is £150,000 of savings at 4%. At £15,000 of income, it's £3,570 of interest, or about £89,000 at 4%. More on the starting rate.
Ways to save more without paying tax
- Cash ISA: interest is tax-free and doesn't count towards your allowance. Compare ISAs and savings accounts.
- Premium Bonds: prizes are tax-free, though the return isn't guaranteed.
- Joint accounts: interest is split between you, so each person uses their own allowance.
Balances are rounded down to the nearest £100 and assume a full year of interest. Sources: GOV.UK: tax on savings interest.