As well as your personal savings allowance, the starting rate for savings is aimed at supporting savers on the lowest incomes.
For 2023/24 it is £5,000. This means that up to £5,000 of the interest received from savings is tax-free. This reduces for every £1 you earn over the Personal Income Tax Allowance of £12,570 for the 2023/24 tax year.
So if your overall taxable income – income from employment plus interest on your savings – is £18,570 or less, you may not need to pay tax on income from your savings. This amount is made up of your annual Personal Income Tax Allowance, plus the 0% rate for £5,000 of savings income, plus the £1,000 new Personal Savings allowance.
Find out more in our guide Tax on savings and investments – how it works