16/07/2026
Is bank interest already taxed before it hits your account?
No - lots of people think that any interest you earn from savings is automatically taxed or exempt from tax.
In reality, most bank interest is paid before tax and not always tax-free.
You may have a tax liability if your interest goes over your Personal Savings Allowance which depends on your income and tax band.
For basic rate, the allowance is £1,000.
For higher rate payers, it's £500.
For the additional rate, it's £0.
So if you're earning interest: be aware of your allowance, keep track of what you earn and check with an accountant if you need to self-declare.
Send this to someone who's building up their savings 💰