Savings Income Tax

The statutory definition, ordering and annual UK rates for savings income.

Savings income is above non-savings income

Reviewed · Current · Law · From 6 April 2023

For rate purposes savings income is treated as the highest part of total income, except that dividend income is higher where both are present.

The order determines which rate bands savings occupies and how much of the starting-rate limit remains. Allowances must be deducted to achieve the greatest reduction in liability.

Exceptions and branches

Dividend and other specially rated income needs the full statutory ordering and is not silently omitted.
Relevant foreign income on the remittance basis is excluded from the section 18 definition.

Savings Income Tax rates for 2026–27

Reviewed · Current · Law · 6 April 2026 to 5 April 2027

£5,000

20%

40%

45%

The starting-rate limit is £5,000; qualifying savings within it is charged at 0%, followed by savings rates of 20%, 40% and 45% according to the main rate-band position.

Savings income is stacked above non-savings income. The starting and nil rates do not remove income from its band position. Scottish and Welsh non-savings rates do not replace these UK-wide savings rates.

Exceptions and branches

The £5,000 limit is reduced pound for pound by taxable non-savings income.
Dividends are ordered above savings and are outside the combined calculation in this slice.
The statutory definition of savings income is narrower than an unverified customer label.

Enacted savings rates from 2027–28

Reviewed · Future · Law · 6 April 2027 to 5 April 2031

£5,000

22%

42%

47%

Savings basic, higher and additional rates rise to 22%, 42% and 47% from 6 April 2027; the £5,000 starting-rate limit is enacted through 2030–31.

This enacted future change is shown separately from the complete annual rule sets. It must not be mistaken for a current rate or composed into a future calculation before the accompanying annual and property-income ordering rules are reviewed.

Exceptions and branches

This is not a complete annual calculation rule set for 2027–28 or later years.
The separate property-income rates and amended ordering also begin from 2027–28.

Savings Income Tax rates for 2023–24

Reviewed · Historic · Law · 6 April 2023 to 5 April 2024

£5,000

20%

40%

45%

The starting-rate limit is £5,000; qualifying savings within it is charged at 0%, followed by savings rates of 20%, 40% and 45% according to the main rate-band position.

Exceptions and branches

The £5,000 limit is reduced pound for pound by taxable non-savings income.
Dividends are ordered above savings and are outside the combined calculation in this slice.
The statutory definition of savings income is narrower than an unverified customer label.

Savings Income Tax rates for 2024–25

Reviewed · Historic · Law · 6 April 2024 to 5 April 2025

£5,000

20%

40%

45%

The starting-rate limit is £5,000; qualifying savings within it is charged at 0%, followed by savings rates of 20%, 40% and 45% according to the main rate-band position.

Exceptions and branches

The £5,000 limit is reduced pound for pound by taxable non-savings income.
Dividends are ordered above savings and are outside the combined calculation in this slice.
The statutory definition of savings income is narrower than an unverified customer label.

Savings Income Tax rates for 2025–26

Reviewed · Historic · Law · 6 April 2025 to 5 April 2026

£5,000

20%

40%

45%

The starting-rate limit is £5,000; qualifying savings within it is charged at 0%, followed by savings rates of 20%, 40% and 45% according to the main rate-band position.

Exceptions and branches

The £5,000 limit is reduced pound for pound by taxable non-savings income.
Dividends are ordered above savings and are outside the combined calculation in this slice.
The statutory definition of savings income is narrower than an unverified customer label.

Reviewed annual savings rates

Tax year	Starting-rate limit	Starting / basic / higher / additional	Status
2023–24	£5,000	0% / 20% / 40% / 45%	Historic
2024–25	£5,000	0% / 20% / 40% / 45%	Historic
2025–26	£5,000	0% / 20% / 40% / 45%	Historic
2026–27	£5,000	0% / 20% / 40% / 45%	Current
From 2027–28	£5,000 through 2030–31	0% / 22% / 42% / 47%	Future

Savings is placed above non-savings income. The savings rates are UK-wide: Scottish and Welsh non-savings bands do not replace them. The enacted future row is not a complete annual calculation set and cannot be used as though it were current.

What changed

5 April 2024: The starting-rate limit is £5,000; qualifying savings within it is charged at 0%, followed by savings rates of 20%, 40% and 45% according to the main rate-band position.
5 April 2025: The starting-rate limit is £5,000; qualifying savings within it is charged at 0%, followed by savings rates of 20%, 40% and 45% according to the main rate-band position.
5 April 2026: The starting-rate limit is £5,000; qualifying savings within it is charged at 0%, followed by savings rates of 20%, 40% and 45% according to the main rate-band position.

Linked from

Sources

Income Tax Act 2007, section 16 — Section 16. Primary authority.
Income Tax Act 2007, section 18 — Section 18. Primary authority.
Income Tax Act 2007, section 25 — Section 25. Primary authority.
HMRC Savings and Investment Manual SAIM1090 — Savings and dividend income treated as the highest part of total income. Official guidance.
Finance Act 2026, section 3 — Section 3(2). Primary authority.
Finance Act 2026, section 9 — Section 9. Primary authority.
Income Tax Act 2007, section 12 — Section 12. Primary authority.
HMRC Savings and Investment Manual SAIM1080 — Starting rate for savings; Personal Savings Allowance. Official guidance.
Finance Act 2026, section 5 — Section 5. Primary authority.
Finance (No. 2) Act 2023, section 3 — Section 3(2). Primary authority.
Finance (No. 2) Act 2023, section 4 — Section 4. Primary authority.
Finance (No. 2) Act 2024, section 3 — Section 3(2). Primary authority.
Finance (No. 2) Act 2024, section 4 — Section 4. Primary authority.
Finance Act 2025, section 3 — Section 3(2). Primary authority.
Finance Act 2025, section 4 — Section 4. Primary authority.

How sources are ranked

Knowledge version: sterling-knowledge@2026-09-11.7. Last checked 11 September 2026.

Savings Income Tax

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