Savings and property income tax
rises from April 2027

The Autumn Budget raised the tax rates on savings and property income by two percentage points from 6 April 2027. Together with the increase announced at the previous Budget, the rates paid on interest and rental profits will be four points higher than they are today. Income tax rates on earnings, and the frozen thresholds, are unchanged — so this is a targeted hit on people who hold wealth in cash and property.

The new rates

Taxpayer band	Savings and property income today (2026/27)	From 6 April 2027
Basic rate	20%	24%
Higher rate	40%	44%
Additional rate	45%	49%

Property income rates apply in England, Wales and Northern Ireland. Income tax thresholds stay frozen until 5 April 2031, so more of your savings interest and rental profit is pulled into higher bands as wages and prices rise.

What it costs in pounds

Take a higher-rate taxpayer with £3,000 of savings interest above their Personal Savings Allowance. Tax today is £1,200. From April 2027 it is £1,320 — an extra £120 a year.

For a landlord with a £10,000 net rental profit taxed at the higher rate, tax rises from £4,000 to £4,400 — an extra £400 a year. The larger the profit, the larger the gap. Because rental profits stack on top of other income, a landlord with a salary may find part of the profit tips into a higher band as well.

Who is most exposed

• Landlords holding property personally rather than through a company.
• Savers with large cash balances outside an ISA or pension, particularly higher-rate taxpayers whose Personal Savings Allowance is only £500 and additional-rate taxpayers who get none.
• Directors who lend money to or hold cash outside their company and receive interest personally.

Options worth reviewing

Use your ISA allowance

The annual ISA allowance of £20,000 is retained. Interest and gains inside an ISA are tax-free, so moving cash savings into an ISA removes them from the higher rates altogether. Our guide to the different types of ISA explains the options.

Think about who holds the asset

Savings and property income are taxed on whoever receives them. Where a spouse or civil partner pays a lower rate, ownership of an asset may be worth reviewing — but a transfer has to be a genuine gift, and for property it can have Capital Gains Tax and Stamp Duty implications. Take advice before moving anything.

Review whether property belongs in a company

Rental profits within a company are subject to Corporation Tax rather than income tax, and are not affected by this change. That does not make a company the right answer: moving existing property into one can trigger Capital Gains Tax and Stamp Duty Land Tax, and getting money back out to you is taxed again as dividends. For new purchases the comparison deserves a proper look; for existing ones it often does not stack up.

Consider pensions

Pension contributions attract tax relief at your marginal rate and the money grows free of tax. Where income is close to a band threshold, contributions can also keep more of your income in the lower band. Check your annual allowance and any carry-forward before contributing.

What to do now

• List your interest and rental income for 2026/27 and estimate it for 2027/28.
• Check how much of your cash sits inside an ISA or pension wrapper.
• If you are a landlord, work out whether your profit pushes you into a higher band.
• Speak to us before moving assets between spouses or into a company — the tax cost of the move can outweigh the saving.

For the wider picture, see our Autumn Budget 2026 overview.

This article is for general information purposes and does not constitute tax advice. The measures described were announced in the Autumn Budget on 28 October 2026 and remain subject to legislation in Finance Bill 2026-27, so details may change. Always speak to a qualified accountant before acting on them.