Savings & ISA Calculator
Calculate compound interest on your savings and compare the tax you pay in a taxable account versus an ISA. Updated for the 2026/27 tax year.
Enter your savings details
Fill in your deposit, interest rate and term to see how your savings could grow over time.
How savings tax and ISA allowances work in 2026/27
Interest earned on UK savings is subject to income tax unless it falls within a tax-free allowance. Three layers of protection apply before tax is charged: any unused Personal Allowance (£12,570); the starting-rate-for-savings band (up to £5,000 at 0%, reduced by non-savings income above the PA); and the Personal Savings Allowance (£1,000 for basic-rate, £500 for higher-rate, £0 for additional-rate taxpayers). Only interest exceeding all three is taxed at your marginal rate.
An ISA completely sidesteps this — all interest, dividends and growth inside an ISA are permanently tax-free, and withdrawals do not affect your PSA, dividend allowance or capital gains allowance. The 2026/27 ISA subscription limit is £20,000 per tax year. The ISA vs taxable comparison tab shows exactly how much tax you save by keeping savings inside an ISA for your specific situation.
Frequently asked questions
- What is the ISA allowance for 2026/27?
- The annual ISA subscription limit for 2026/27 is £20,000. This can be split across any combination of Cash ISAs, Stocks & Shares ISAs, Innovative Finance ISAs and Lifetime ISAs (capped at £4,000 within the overall limit). All growth and withdrawals within an ISA are free of income tax and capital gains tax. Note: from 6 April 2027 a cash ISA sub-limit of £12,000 (for under-65s) is expected to take effect.
- What is the Personal Savings Allowance in 2026/27?
- The Personal Savings Allowance (PSA) lets you earn interest on savings without paying tax: £1,000 for basic-rate taxpayers (20%), £500 for higher-rate taxpayers (40%), and £0 for additional-rate taxpayers (45%). Interest above these thresholds is taxed at your marginal rate. The PSA applies outside an ISA — interest inside an ISA is always tax-free and does not count against it.
- What is the starting rate for savings?
- Taxpayers with low non-savings income (employment income, self-employment etc.) may benefit from a starting-rate band of up to £5,000 at 0% on savings interest. The band is reduced £1-for-£1 by non-savings income above the Personal Allowance (£12,570). If your non-savings income exceeds £17,570, the starting-rate band is fully used up and only the PSA applies.
- Is it better to save in an ISA or a regular savings account in 2026/27?
- For basic-rate taxpayers with moderate savings, the PSA (£1,000 of tax-free interest) often covers most interest earned, making the ISA advantage marginal until balances are large. Higher-rate taxpayers with a £500 PSA benefit more from an ISA once interest exceeds that threshold. Additional-rate taxpayers have no PSA at all, so an ISA is always more efficient. The ISA vs taxable tab on this calculator shows the exact tax saving for your inputs.
- How does compound interest work?
- Compound interest means you earn interest on your interest as well as on your original principal. The longer your money stays invested, and the higher the interest rate and compounding frequency, the more pronounced the compounding effect. Monthly compounding (interest added and earning further interest every month) produces slightly more than annual compounding at the same AER (Annual Equivalent Rate).