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What tax rate can I expect on my savings account?

The first step is to identify you're correct level of personal allowance. This depends on several things, including your age, marital status and any recognised disabilities.

The second step is to recognise that most people have yearly 'earnings' made up of several different streams: an income, savings account, a pension etc.

In order to work out what rate your savings will be taxed at, you need to add up your total 'earnings', deduct your personal allowance and then work out what it is that is left to be taxed.

If your total pre-tax 'earnings' are less than your correct personal allowance plus £2,320 then savings will be taxed at 10%. Similarly if all your earnings are savings based, then the first £2,320 will be taxed at 10% and the remainder at 20%. If you have a mixture, deduct your personal allowance and then still have more than £2,320 in savings, the whole lot will be taxed at 20%.

Tax tables are readily available to check your personal allowance and it is perhaps worth looking into 'tax-free' savings accounts.