Taxation of savings income

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Taxation of savings income

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
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Savings income includes interest, profits from deeply discounted securities, accrued income profits and chargeable event gains.

Non-savings non-dividend income (commonly referred to in practice as non-savings income) is taxed first, and then savings income, with dividend income taxed last. There are four possible rates of tax applying to savings income from 2015/16 to 2026/27: 0%, 20%, 40% or 45%. From 2027/28 onwards, the income tax rates for savings income are 0%, 22%, 42%, 47%.

Note that the tax rates for savings income (and dividend income) have not been devolved. This means that Scottish and Welsh income tax rates only apply to the non-savings income of Scottish or Welsh taxpayers. As far as the savings income of Scottish and Welsh taxpayers is concerned, it is the UK tax bands and rates that apply. For the definition of Scottish and Welsh taxpayers, see the Proforma income tax calculation guidance note.

Taxation of savings income for the 2026/27 tax year at a glance:

  1. •

    starting rate for savings: 0% for the first £5,000 of savings income (but this rate

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  • 01 Jun 2026 08:50

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