On 6 April 2016 a tax-free Personal Savings Allowance (PSA) will be introduced for savings income (such as interest) paid to individuals.
Basic rate tax payers will be able to receive up to £1,000 of savings income, and higher rate taxpayers can receive up to £500 of savings income, without any tax being due. The PSA will not be available to any saver with additional rate income. Alongside the introduction of the PSA, banks, building societies and National Savings and Investments (NS&I) will cease to deduct tax from account interest they pay to customers. The measure will have effect for savings income paid on and after 6 April 2016.