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The amount of savings interest you can earn each year tax-free.
The Personal Savings Allowance (PSA) lets you earn a certain amount of savings interest each year without paying tax on it. Basic rate taxpayers can earn up to £1,000 in interest tax-free, higher rate taxpayers up to £500, and additional rate taxpayers get no allowance. This applies to interest from bank accounts, building societies, and savings accounts. It is separate from the ISA allowance.
This definition is for informational purposes only and does not constitute tax, legal, or financial advice. Rules may change and outcomes depend on your circumstances.
These GOV.UK and HMRC sources provide the official context for this glossary entry. The definition is educational and does not determine your individual tax position.