Savings Interest Tax Rises in April 2027: What Savers Can Do
Autumn Budget 2026 lifts income tax on savings interest from April 2027, to 24%, 44% and 49%. Here is how ISAs and allowances can help.
Savers face a higher tax bill on interest from April 2027 under changes set out in Autumn Budget 2026, which makes tax-free ISA savings more valuable.
The new rates
From April 2027, basic-rate taxpayers will pay 24% on savings interest above their £1,000 personal savings allowance. Higher-rate taxpayers will pay 44% above their £500 allowance. Additional-rate taxpayers have no allowance and pay 49% on all savings interest, according to Hargreaves Lansdown's Budget analysis.
ISAs stay in place
Planned ISA reforms that had been discussed ahead of the Budget have been cancelled. No new ISA product is expected, so the existing cash and stocks and shares ISAs remain the main way to shelter interest and returns from tax.
What savers can do
Check how much interest you earn outside an ISA and whether it exceeds your allowance. Moving savings into a cash ISA before or during the new tax year can protect interest from the higher rates. Couples can also consider making full use of both partners' allowances.
Pensions and other changes
The Budget also confirmed changes for pensioners, including a new personal allowance for those whose total income is up to the full new state pension, with details still awaited. Frozen tax thresholds mean the full new state pension will exceed the personal allowance from April 2027.
Sources: Hargreaves Lansdown, Autumn Budget 2026 explained (28 October 2026). General information, not financial advice; check your own circumstances or speak to an adviser.