Short answer: From 6 April 2027, UK rental income tax (the property income rate) and the tax rate on savings interest both go up to 24% (basic), 44% (higher) and 49% (additional). In the 2026/27 tax year both kinds of income are taxed at 20%, 40% and 45%.
Budget 2025 had already announced a 2-point rise from April 2027. Budget 2026 (28 October 2026) adds another 2 points on top.
The new savings rates apply across the UK. The property rates apply to individuals in England, Wales and Northern Ireland, and the Scottish and Welsh governments can set their own property rates.
Your Personal Savings Allowance and ISA allowance (£20,000) don’t change, so most savers with modest balances won’t pay any more. Landlords and people with large cash savings outside ISAs will.
Checked against GOV.UK’s tax information and impact note (29 October 2026), HMRC’s Budget 2026 rates annex and the House of Commons Library on 12 November 2026. The changes are going through Parliament in Finance Bill 2026-27.
The new rates side by side
| Income type | 2026/27 | From 6 April 2027 |
|---|---|---|
| Savings: basic rate | 20% | 24% |
| Savings: higher rate | 40% | 44% |
| Savings: additional rate | 45% | 49% |
| Property: basic rate | 20% (main rates) | 24% |
| Property: higher rate | 40% (main rates) | 44% |
| Property: additional rate | 45% (main rates) | 49% |
| Wages and pensions (main rates) | 20% / 40% / 45% | 20% / 40% / 45% (unchanged) |
| Dividends | 10.75% / 35.75% / 39.35% | Unchanged |
Sources: GOV.UK: changes to tax rates for property and savings income, HMRC Budget 2026 Annex A.
The bands don’t change. The basic-rate band is still £37,700 above the £12,570 personal allowance, and the higher-rate band runs up to £125,140. Only the rate charged on savings and rental income inside those bands goes up.
Is it law yet?
Not fully. On 3 November 2026 MPs approved the Budget resolution increasing the property and savings rates by 337 votes to 180. The rates are in clauses 3 and 4 of Finance Bill 2026-27, which was introduced the same day (House of Commons Library). Bills can change before Royal Assent, but a government with this majority rarely loses a Budget measure.
Who pays more rental income tax and savings tax?
HMRC’s own estimates:
- Landlords: around 5% of taxpayers will pay an average of about £225 more in 2027/28. By 2031/32 about 2.4 million landlords will be affected.
- Savers: around 12% of taxpayers will pay an average of about £113 more in 2027/28. By 2031/32 about 6 million people will be affected.
- Trustees of trusts with property or savings income, and personal representatives.
HMRC also notes that a basic-rate taxpayer making full use of the starting rate for savings and the Personal Savings Allowance would need over £150,000 in savings outside an ISA, earning 4%, before paying any tax on interest. Most savers won’t notice any change.
Your tax-free allowances (unchanged for 2027/28)
| Allowance | 2027/28 |
|---|---|
| Personal Allowance | £12,570 (tapered above £100,000 income) |
| Personal Savings Allowance, basic-rate taxpayer | £1,000 |
| Personal Savings Allowance, higher-rate taxpayer | £500 |
| Personal Savings Allowance, additional-rate taxpayer | £0 |
| Starting rate for savings | Up to £5,000 at 0% (reduced by other income above the Personal Allowance) |
| ISA subscription limit | £20,000 |
| Dividend allowance | £500 |
Source: HMRC Budget 2026 Annex A.
Worked examples
These are simplified examples that ignore other reliefs.
1. A higher-rate saver. Tom earns a £60,000 salary and gets £3,000 of interest from a fixed-rate bond held outside an ISA. His £500 Personal Savings Allowance covers part of it, leaving £2,500 taxable.
- 2026/27: £2,500 × 40% = £1,000
- 2027/28: £2,500 × 44% = £1,100 (+£100)
2. A basic-rate landlord. Aisha has a £30,000 salary and £10,000 of rental profit, all inside the basic-rate band.
- 2026/27: £10,000 × 20% = £2,000
- 2027/28: £10,000 × 24% = £2,400 (+£400)
3. A higher-rate landlord. Raj has £12,000 of rental profit taxed in the higher-rate band.
- 2026/27: £12,000 × 40% = £4,800
- 2027/28: £12,000 × 44% = £5,280 (+£480)
Landlords with mortgages: individual landlords still can’t deduct mortgage interest from rental profits. They get a tax reduction instead. Ask your adviser how this works alongside the new property rates for your own figures before you rely on any estimate.
What savers can do before April 2027
- Use your ISA allowance. You can put up to £20,000 into ISAs in 2026/27 and again in 2027/28. Interest inside an ISA is tax-free, whatever the rate.
- Use your spouse’s or civil partner’s allowances. Moving savings to a partner who pays a lower rate, or who has unused allowances, can cut the household bill. Gifts between spouses are generally free of capital gains tax and inheritance tax.
- Look at Premium Bonds or other tax-free products if they suit your goals. Weigh the lack of guaranteed interest.
- Check fixed-term bonds that mature after April 2027. Interest is generally taxed when it’s paid or credited, so the payment date can matter.
- Consider pension contributions. Higher-rate taxpayers get relief at their marginal rate, and pension growth isn’t taxed as savings income.
What landlords can do before April 2027
- Review the ownership structure. Joint ownership with a lower-earning spouse, or a limited company, may change your tax position. Incorporating can trigger stamp duty land tax and capital gains tax, so get advice first.
- Time allowable expenses. Repairs and allowable costs reduce profit. Bringing genuine, necessary spending into the right year is legitimate. Don’t invent costs.
- Check whether you’re due to join Making Tax Digital. Landlords with more than £30,000 of qualifying income in 2025/26 must use MTD for Income Tax from 6 April 2027, the same day the new rates start.
- Model your rents. Higher tax plus higher mortgage costs may affect whether a property still pays its way.
Key dates for your diary
| Date | What happens |
|---|---|
| 28 October 2026 | Budget 2026 announces a further 2-point rise |
| 3 November 2026 | MPs approve the rates resolution (337 to 180), and Finance Bill 2026-27 is introduced |
| 31 January 2027 | Self Assessment deadline for 2025/26, which also decides whether you join MTD |
| 5 April 2027 | Last day to use your 2026/27 ISA allowance at the current rates |
| 6 April 2027 | New 24% / 44% / 49% savings and property rates start, along with MTD for £30,000+ |
| 31 January 2029 | Deadline for the first Self Assessment return under the new rates (2027/28) |
Scotland and Wales
The savings rates apply across the UK. For property income, GOV.UK says the new rates apply to individuals in England, Wales and Northern Ireland, while the Scottish and Welsh governments “have been provided with the ability to set property income rates” within their existing powers. If you’re a Scottish or Welsh taxpayer, check the announcements from the Scottish Government or the Welsh Government before you plan.
For related reading on UK money matters, see our guides to state vs workplace pensions and the UK energy price cap. If you live abroad and have UK income, read claiming a UK pension from abroad.
Quick checklist before 6 April 2027
- Add up your savings interest outside ISAs and pensions for 2026/27 and estimate 2027/28.
- Use your ISA allowance for 2026/27 before 5 April 2027, and plan 2027/28’s on 6 April.
- Check who in your household pays the lowest rate. Savings held by a lower-rate spouse or partner may be taxed less.
- Landlords: forecast your 2027/28 profit at the new rates and check your mortgage interest tax credit.
- Review payments on account, because a higher rate can mean larger payments in January and July.
- Speak to an accountant before restructuring property ownership. Transfers can trigger Capital Gains Tax and Stamp Duty Land Tax.
Disclaimer: This article is for general informational and educational purposes only. It is not tax, legal, investment or financial advice. Figures were checked against official sources on November 12, 2026, but tax rules, thresholds and deadlines change and depend on your personal circumstances and location. Verify details with official sources (such as the IRS, HMRC, HealthCare.gov or the SEC) and consult a qualified tax adviser, accountant or financial professional before acting. taxtotech.com is not affiliated with HMRC, HM Treasury or any government body.
UK rental and savings income tax FAQ
What is the UK property income tax rate from April 2027?
24% at the basic rate, 44% at the higher rate and 49% at the additional rate, for individuals in England, Wales and Northern Ireland, from 6 April 2027.
Is savings interest taxed more from 2027?
Yes. Savings income above your allowances will be taxed at 24%, 44% or 49% from 6 April 2027, up from 20%, 40% or 45% in 2026/27.
Does the Personal Savings Allowance change?
No. It stays at £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers. Additional-rate taxpayers don’t get one.
Are ISAs affected?
No. Interest and gains inside an ISA stay tax-free, and the overall ISA limit stays at £20,000 for 2027/28.
Does this affect my salary or pension?
No. The main income tax rates on wages and pensions stay at 20%, 40% and 45%.
Is the rise confirmed?
MPs approved the Budget resolution on 3 November 2026, and the measure is in Finance Bill 2026-27. It becomes final law on Royal Assent.
Conclusion
From April 2027, UK rental income tax and savings tax will be 4 percentage points higher than in 2026/27, at every rate band. For most savers, their allowances and ISAs mean nothing changes. Landlords and people with large cash balances outside ISAs should use the next five months to fill their ISAs, review who owns what and get ready for Making Tax Digital. For anything structural, like transferring property or incorporating, speak to a qualified UK tax adviser first.
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