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Personal Savings Allowance (PSA)

How much can you save tax-free?

Whatever you’re saving for, it pays to know how you can really make the most of your hard-earned cash.

Your Personal Savings Allowance, available to most savers, subject to tax status, is designed to give you a little more for your money.

What is a Personal Savings Allowance (PSA)?

On 6th April 2016, HMRC introduced the Personal Savings Allowance, which allows savers to earn interest on savings income, tax-free – up to a certain amount. 

Savings income includes interest from:

  • Bank and Building Society accounts;
  • Accounts with providers like Credit Unions or National Savings and Investments;
  • Interest distributions (but not dividend distributions) from authorised unit trusts, open-ended investment companies and investment trusts;
  • Income from government or company bonds;
  • Most types of purchased Life Annuity payments.

It’s worth noting that interest from Individual Savings Accounts (ISAs) does not count towards your Personal Savings Allowance because these accounts are already tax-free!

So, it’s ‘win-win’ for you, our Members.

How much will your allowance be?

Your allowance is worked out around your income tax rate and the following guide will give you an idea of what you may be entitled to.

  • If you’re a basic rate taxpayer, you can earn up to £1,000 of interest without paying tax;
  • If you’re a higher rate taxpayer, you can earn up to £500 of interest without paying tax;
  • If you’re an additional rate taxpayer, you are not eligible for a personal savings allowance.

What to do now

This is the easy bit! You don’t need to do anything at all to claim your Personal Savings Allowance (except of course, make sure you have a savings account in the first place).

The interest on your savings will be automatically paid without tax deducted.

Please note; if you exceed your Personal Savings Allowance you may need to pay tax on the interest you earn. HMRC will normally collect the tax owed by changing your tax code.

Why save with Progressive?

For over 100 years, we’ve been helping people in Northern Ireland save for the important things in their lives. We’re a building society, made up of local members helping local people, always with your best interests at heart.

We support people all over Northern Ireland saving for their future.

We have knowledge staff in each of our 11 branches, so you can pop in and talk to us face to face about finding the right savings account for you.

Simply bring some photographic ID, e.g. a current passport or driving licence, along with you and we’ll have you up, running and saving in no time.  For further information on photographic ID required view the Proving your Identity leaflet here

For more information, simply contact your local branch and we’ll be more than happy to help you.

Get in touch today!
We look forward to welcoming you.

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To request further information regarding our savings products or to request help with an existing account, please get in touch.

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