The Personal Savings Allowance is how much interest you can earn tax-free from a savings account, bond, or P2P loan. It’s £1,000 if you’re a basic rate taxpayer (your annual income is less than £50,000) or £500 if you’re a higher rate taxpayer.

If your annual income is over £150,000, you’re considered an additional rate taxpayer and don’t get a Personal Savings Allowance.

This allowance doesn’t apply to interest earned from ISA accounts or Investment Bonds. Interest earned from them is always tax-free.