Savings tax changes in April 2027
For the 2026/27 tax year · checked 22 Sep 2026 against GOV.UK
From 6 April 2027, tax on savings interest goes up by 2 percentage points, to 22%, 42% and 47%. The tax-free allowances stay the same. The Cash ISA limit also falls to £12,000 a year for under-65s.
The new rates
| Tax band | 2026/27 | From April 2027 |
|---|---|---|
| Basic rate | 20% | 22% |
| Higher rate | 40% | 42% |
| Additional rate | 45% | 47% |
These rates apply only to savings income. Tax on wages and pensions doesn't change.
What it costs you
| Salary and interest | 2026/27 | 2027/28 |
|---|---|---|
| £35,000 salary, £2,500 interest | £300 | £330 |
| £30,000 salary, £6,000 interest | £1,000 | £1,100 |
| £60,000 salary, £2,500 interest | £800 | £840 |
| £150,000 salary, £2,500 interest | £1,125 | £1,175 |
The Cash ISA change
The overall ISA allowance stays at £20,000 a year. From April 2027, if you're under 65, only £12,000 of it can go into a Cash ISA. The rest has to go into investments. If you're 65 or over, you can still put the full £20,000 into cash.
What you can do before April 2027
- Use this year's full £20,000 Cash ISA allowance while you can.
- Move savings into a partner's name if they pay a lower rate of tax or have unused allowance.
- Consider fixed-rate bonds that pay interest before 6 April 2027. Interest is taxed in the year it's paid.
Announced in the Autumn Budget 2025. Source: GOV.UK: tax on savings interest.