Tax and your Raisin UK savings
Understanding tax on your savings doesn't need to be complex. This guide gives you a high-level overview of how UK savings interest is taxed and how Raisin UK makes managing your tax reporting simple.
Important
This guide provides general information based on standard HMRC rules (GOV.UK) and does not constitute personalised financial or tax advice. Everyone’s tax situation is unique. If you are unsure about your tax position, please seek guidance directly from HMRC or a regulated tax adviser.
Key Takeaways
The Personal Savings Allowance (PSA) lets most UK savers earn tax-free interest each tax year based on their income tax band.
Raisin UK’s partner banks pay interest gross, meaning .
Raisin UK provides a single consolidated interest statement each tax year to help make your tax reporting simpler.
How interest is taxed in the UK
In the UK, savings interest is considered taxable income. Most individuals receive an annual tax-free Personal Savings Allowance (PSA) according to their income tax band:
Income tax band | Personal Savings Allowance |
Basic rate | £1,000 tax-free interest |
Higher rate | £500 tax-free interest |
Additional rate | £0 tax-free allowance |
Any interest earned across all non-ISA savings accounts above your personal allowance is subject to tax at your standard income tax rate. You can read more about how interest earned in the UK is taxed on the UK Government website.
Please note that personal tax circumstances vary depending on a number of factors. If you are unsure about your tax position, you should seek guidance directly from HMRC or a regulated tax adviser.
What about Cash ISAs? Savings held within a Cash ISA remain tax-free as long as you stay within the annual ISA subscription limit.
Does the Personal Savings Allowance only apply to interest earned through savings accounts?
No. The Personal Savings Allowance also applies to interest earned from other sources:
- Any accounts held with banks, building societies and credit unions (including current accounts)
- Unit trusts, investment trusts and open-ended investment companies
- Government and company bonds
- Peer-to-peer lending
- Trust funds
- Payment protection insurance (PPI)
- Life annuity payments
- Some life insurance contracts
It doesn’t apply to earnings made by selling investments like stocks or shares (capital gains tax) or dividends (dividends tax).
How Raisin UK handles tax on your savings
All interest earned with our partner banks is paid gross. Neither Raisin UK nor our partner banks deduct tax from your earnings.
Does Raisin UK’s partner banks report interest earnings to HMRC?
As regulated UK financial institutions, our partner banks are required to report interest earnings directly to HMRC each tax year.
How does Raisin help you track taxable interest?
Every tax year, we send you a single statement detailing all interest earned across the savings accounts you hold with Raisin UK. This is delivered straight to your secure Raisin UK postbox to make checking the interest you’ve earned simple.
How tax is collected by HMRC
If you owe tax on the interest you’ve earned through Raisin UK, there are typically two routes through which HMRC will collect the amount owed:
- If you pay tax via PAYE (employed/pension): HMRC generally collects any tax due on savings interest automatically by adjusting your tax code.
- If you complete a Self Assessment return: You can refer to your annual Raisin consolidated tax statement to report your total interest earnings accurately.
Savings made simple
Raisin UK offers savings accounts with competitive rates from over 40 partner banks, all with FSCS protection up to £120,000 per person, per bank. Register once and open accounts all from a single login, with no fees, while managing your savings with our intuitive dashboard.
Easy access savings accounts
Top up and withdraw money when it suits you with an easy access savings account.
Fixed rate bonds
Earn a fixed rate of interest across terms from 3 months to 5 years.
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All interest rates displayed are Annual Equivalent Rates (AER), unless otherwise explicitly indicated. The AER illustrates what the interest rate would be if interest was paid and compounded once a year. This allows individuals to compare more easily what return they can expect from their savings over time.
Raisin UK is a trading name of Raisin Platforms Limited which is authorised and regulated by the Financial Conduct Authority (FRNs 813894 and 978619). Raisin Platforms Limited is registered in England and Wales, No 11075085. Registered office: Cobden House, 12-16 Mosley Street, Manchester M2 3AQ, United Kingdom. The information on this website does not constitute financial advice, always do your own research to ensure it's right for your specific circumstances. Tax treatment depends on the individual circumstances of each customer and may be subject to change in the future.