Your savings and the Personal Savings Allowance

In April 2016, the Government changed legislation so that UK individuals no longer pay tax on the first £1,000 of interest earned on their savings (£500 if you’re a higher-rate taxpayer) across all saving products.

  • Basic rate (20%) taxpayers can earn £1,000 interest with no tax 
  • Higher rate (40%) taxpayers can earn £500 interest with no tax
  • Additional rate (45%) taxpayers don’t receive an allowance

The savings income that counts towards your Personal Savings Allowance includes:

  • Interest from banks, building societies and other account providers
  • Interest distributions (but not dividend distributions) from authorised unit trusts, open-ended investment companies and investment trusts
  • Income from government or company bonds
  • Some types of purchased life annuity payments and gains from certain life insurance contracts

The Personal Savings Allowance and ISAs

As Cash ISAs already feature tax-free interest, the Personal Savings Allowance doesn’t apply to them - which means you can really make the most of your tax-free savings. 

The Personal Savings Allowance and joint accounts with differing rate taxpayers

If you have a joint account and one of you pays a higher rate of tax, the interest earned is assumed to be split equally between you. For instance, if one of you is a basic rate taxpayer and the other a higher rate tax payer, then your joint Personal Savings Allowance would be £1,500.

How to pay savings tax if you owe it

If the interest you earn exceeds your Personal Savings Allowance, HMRC will usually collect tax on the excess by changing your tax code in the PAYE system. If you complete a Self-Assessment tax return, you should continue doing so as normal. Further information is available on the HMRC website.

NOTE: Tax treatment depends on the individual circumstances of each customer and may be subject to change in the future.

Help Articles


Saving With Ford Money

How to open and manage accounts, deposit information, Nominated Account, passwords, your Customer ID - and a guide to tax and savings.


Opening an account

Opening/managing joint accounts

FATCA and CRS (for non-UK only Tax residents)

Savings and the Personal Savings Allowance

Making a deposit

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The Basics

Information on our opening times, contacting us, online security, what to do if you have a complaint - and more.


How to contact us

Our relationship to Ford Motor Company

Your privacy rights

Staying safe online

If you have a complaint

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About Our Products

This section covers the ins and outs of all our products including deposits, balances, terms, withdrawals and more.


Our Flexible Saver

Our Fixed Saver

Our Flexible Cash ISA

Our Fixed Cash ISA

More about our ISAs

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Online Account Management

Run your Ford Money account: from changing interest frequency and making withdrawals, to login troubleshooting and customising your account.


Accessing your account

Managing your account

Changing your Nominated Account

Managing your personal details

How to review and select your maturity options

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