Enter your savings balance and interest rate to see exactly how much tax you pay outside an ISA, how the Personal Savings Allowance affects you, and whether a cash ISA makes financial sense at your level.
Basic rate taxpayers can earn £1,000 of savings interest each year without paying tax. Higher rate: £500. Additional rate: £0. Inside a cash ISA, all interest is tax-free with no limit. The PSA does not affect ISA interest.
The basic rate on savings income rises from 20% to 22%. The higher rate rises from 40% to 42%. The additional rate rises from 45% to 47%. These are 2027/28 changes. The calculator shows both. Inside an ISA, none of this applies.
Under-65s can only put £12,000 into a cash ISA from 6 April 2027, down from £20,000. Over-65s keep the full limit. 2026/27 is the last full year to shelter the entire £20,000 in cash.
The Personal Savings Allowance means many people do not pay any tax on savings interest right now. Basic rate taxpayers get £1,000 of interest tax-free each year; higher rate taxpayers get £500. Once your interest exceeds that allowance, the amount above it is taxed as income at your marginal savings rate — 20% for basic rate taxpayers in 2026/27, rising to 22% in 2027/28.
A cash ISA makes immediate financial sense when your annual interest is higher than your Personal Savings Allowance. Below that threshold it does not save you tax today, but it does protect you against rate changes, balance growth, and the April 2027 savings tax rise. It also uses your ISA allowance before the cash limit drops from £20,000 to £12,000 for under-65s in April 2027.
The calculator above shows the honest position for your specific numbers — including where the ISA offers no immediate saving and where it starts to make a genuine difference.
ISA rules are changing. Dividend tax has already risen. Savings tax and the cash ISA limit change in April 2027. Here is what to do before 5 April and how to use 2026/27 as a window.