In the UK, interest from savings is taxed based on your income:
Personal Savings Allowance (PSA):
Basic-rate taxpayers: £1,000 tax-free
Higher-rate taxpayers: £500 tax-free
Additional-rate taxpayers: £0 allowance
Interest above your allowance is taxed at your income tax rate.
ISAs (Individual Savings Accounts) are fully tax-free.
For children, interest may be taxed differently if it’s in their name or if the “parental settlement rules” apply.
