If you are coming to the end of your mortgage, credit card or loan payment holiday, we will contact you before it ends, there is no need to call us. To help find the right solution for your needs you can use our coronavirus support tools for credit cards and loans and for Halifax mortgages. If you have a Bank of Scotland mortgage, find out more here.

Personal Savings Allowance (PSA)

What is a PSA and why does it matter to me?

What is a PSA

In a nutshell, it allows basic rate taxpayers to earn up to £1,000 interest on their savings each year without paying any income tax on it.

Higher rate taxpayers have a PSA of £500 before they pay tax while additional rate taxpayers who earn £150,000 over the personal allowance don’t qualify.

What does the PSA mean for me?

Put simply, the PSA means that:

  • The first £1,000 of savings interest that basic rate taxpayers earn and the first £500 for higher rate taxpayers is free from income tax.
  • Most people no longer pay tax on their savings interest.
  • It’s your responsibility to pay any tax you may owe directly to HM Revenue & Customs, according to your individual circumstances.

Please visit www.gov.uk/hmrc/savingsallowance for more information.

The maximum you can gain thanks to the allowance is £200 if you earn £1,000 interest.

You need quite significant savings to get the full benefit of the changes, but even those with a more modest nest egg will get something back.