Reader questions: What tax-free savings interest am I allowed?

Can I get the savings allowance on interest earned by my deposit account as well as an ISA?

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Robert, whose cash ISAs earn about £500, asks: “Can I also get the savings allowance on interest earned by my deposit account?”


Yes. The interest earned on savings in a cash ISA is completely free of tax. It’s invisible to HMRC, so the first £1,000 of interest on any non-ISA savings is also free of tax, covered by the £1,000 per year savings allowance.

If you pay  higher-rate tax, the allowance is £500, and zero if you’re on the top rate of 45% (or 46% in Scotland).

In addition, people on low incomes can have up to £5,000 in savings interest taxed at 0%.

If your non-savings income is no more than the personal allowance (£11,850 this tax year, and £12,500 for 2019—20), the first £5,000 of savings income is taxed at 0%. And the next £1,000 is tax-free, thanks to the savings allowance. So, from 6 April (on top of any ISAs interest) your annual income can be £18,500 (£12,500 personal allowance plus £5,000 of savings interest and £1,000 savings allowance) with not a penny in tax to be paid. This applies in Scotland, too, even though income tax rates and bands are different.


For information, go to and search “tax on savings”. Email your questions to