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Personal Savings Allowance

On 6 April 2016 the government introduced the personal savings allowance, the biggest change to the taxation of savings interest for 25 years. Everyone is entitled to the allowance, subject to their tax status, and it allows you to earn interest on all of your savings tax free, up to a certain amount.

How this affects you

  • Basic rate tax payer can earn £1,000 interest tax free
  • Higher rate tax payer can earn £500 interest tax free
  • Additional rate tax payer does not qualify for the allowance

How much will your allowance be?

The table shows your allowance from 6 April 2016, depending on whether you’re a basic, higher or additional rate taxpayer.

  Tax rate

  Income band

  Personal Savings Allowance


  Up to £43,000

  Up to £1,000 in savings income is tax-free


  £43,001 - £150,000

  Up to £500 in savings income is tax-free


  Over £150,000


If you exceed your Personal Savings Allowance you may still need to pay tax on the interest you earn. HMRC will normally collect this by changing your tax code.

The current tax rules are subject to change and the value of tax benefits depends on individual circumstances.

For more information read the HMRC factsheet.

Contact Hampshire Trust Bank’s Personal Savings team on 020 7862 6222020 7862 6222 or email us.
9am to 5pm Monday to Friday, excluding Bank Holidays

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