Short answer
Only if your savings interest is above your tax-free allowances. From 6 April 2027 the tax rates on taxable savings interest rise to 24% (basic rate), 44% (higher rate) and 49% (additional rate) across the UK. Interest in ISAs stays tax-free, and the Personal Savings Allowance still applies, so many savers will pay nothing extra.
What's changing
The Budget increases all income tax rates on savings income by 2 percentage points from 6 April 2027: the savings basic rate becomes 24%, the higher rate 44% and the additional rate 49%. These apply across the UK. Budget 2026
This is on top of a separate 2-point rise announced at the 2025 Budget, so the final rates are 4 points above today's 20%, 40% and 45%.
Who is protected
ISAs: interest inside an ISA is tax-free, and the cash ISA limit stays at £20,000.
Personal Savings Allowance: basic-rate taxpayers can earn £1,000 of interest tax-free and higher-rate taxpayers £500. Additional-rate taxpayers get no allowance.
Starting rate for savings: people with low earnings may be able to earn up to £5,000 more of interest tax-free. The government says basic-rate taxpayers would need over £25,000 in savings outside ISAs before paying any tax.
What to check
Add up the interest you expect across all non-ISA accounts in a year and compare it with your allowance.
If you're near or over the allowance, think about using your ISA allowance first. For larger sums or pensions, speak to an FCA-regulated adviser.
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Questions
Questions people also ask
What are the new savings tax rates from April 2027?
24% for basic-rate taxpayers, 44% for higher-rate and 49% for additional-rate, on savings interest above your tax-free allowances.
Does the Personal Savings Allowance still exist?
Yes. Basic-rate taxpayers keep £1,000 of tax-free interest a year and higher-rate taxpayers £500.
Is ISA interest affected?
No. Interest earned inside an ISA remains tax-free.
Does this apply in Scotland and Wales?
Yes. The savings tax rates apply across the whole UK.