Starting Rate for Savings

Find out about the starting rate for savings, how it works and what happens once you exceed the savings starting rate.

What is the Starting Rate for Savings?

The savings starting rate is the amount of interest a UK individual can earn tax-free.

How Much is the Savings Starting Rate 2022-23?

The starting rate for savings entitles UK individuals with taxable income of up to £17,570 to earn up to £5,000 in bank interest tax-free. But the more you earn, the more this starting rate is reduced.

The starting rate for savings is reduced by £1 for every £1 a person earns over the personal allowance. That means by the time they earn £17,570 they are no longer eligible to claim the starting rate.


In the tax year 2022/2023, you earn £14,000 from your employment and get £500 of interest on your savings. You have used up your personal allowance through your payslip, so your starting rate for savings is reduced by £1,430 (£14,000 – £12,570).

Your starting rate for savings is £3,570 (£5,000 – £1,430), meaning you do not have to pay tax on your savings.

What Happens Once You Exceed the Savings Starting Rate?

Once your earnings go over £17,570 and you are no longer eligible for the tax-free savings rate, you may be able to claim the personal savings allowance.


About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek and money nerd helping financial DIY-ers organise their money so they can hit their goals quicker.

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