Savings and Property Income Go to 24%, 44% and 49%: What Changes on 6 April 2027

From 6 April 2027, the tax on savings interest and rental profit rises to 24% at the basic rate, 44% at the higher rate and 49% at the additional rate. That is four percentage points above today's rates, the result of two Budgets in a row, and the £20,000 cash ISA allowance that shelters you from it survived a planned cut.

Here is what the Budget documents actually say, what did not change, and what those two decisions do when you put them side by side.

The rates

Annex A of the Budget gives savings income its own table. The basic rate goes from 20% this tax year to 24% in the 2027 to 2028 year. The higher rate goes from 40% to 44%. The additional rate goes from 45% to 49%. The starting rate for savings stays at 0% on a limit of £5,000 in both years.

Property income works slightly differently. This tax year, rental profit is charged at the main rates of income tax, which are 20%, 40% and 45%. From April 2027 it stops being charged that way. Annex A puts it plainly: "From April 2027, the property rates of income tax are separated from the main rates." The new property rates land in the same place as savings, at 24%, 44% and 49%.

Both sets take effect from 6 April 2027.

The government is keeping the rates of tax paid on earnings unchanged, while seeking an additional contribution from those with taxable income from assets.

That sentence from section 3.9 is the whole policy in one line. The Budget puts the scale of it at 84% of income tax payers unaffected, with around half the revenue expected to come from the top 10% of households.

What did not change

Quite a lot, and it is worth being specific, because the headlines have not been.

• Rates on earnings. Unchanged. Section 3.9 is explicit about it.
• Dividends. Unchanged in both years: 10.75% ordinary, 35.75% upper, 39.35% additional, on income above the £500 dividend allowance.
• The Personal Savings Allowance. £1,000 for basic rate taxpayers and £500 for higher rate taxpayers, the same in both years. The allowance table carries no additional rate row.
• The starting rate for savings. 0%, on a limit of £5,000, in both years.
• The ISA allowance. £20,000 in both years. Junior ISA and Child Trust Fund stay at £9,000.

And then the one that was supposed to change.

The cash ISA cut was reversed

A reduced cash ISA limit had been expected since the previous Budget. It is not happening. Section 3.9: "To continue providing generous support for savers, the government has decided not to reduce the cash ISA limit, so that it remains at £20,000."

The Budget's own framing of why that matters is that basic rate taxpayers "would need over £25,000 in savings in addition to any ISA savings before paying tax", and that those also eligible for the starting rate for savings "could have up to £150,000 in savings in addition to their ISAs without paying tax".

One honest caveat on those two figures. They carry a footnote, the body text does not state the interest rate they assume, and we have not read the footnote. Treat them as the direction of travel rather than a number to plan against.

Two decisions, one direction

The shelter did not get smaller. The thing it shelters you from got more expensive. Both of those pull the same way, and the arithmetic fits on the back of an envelope.

Take a higher rate taxpayer whose £500 Personal Savings Allowance is already used up by other interest, with a further £20,000 in a taxable savings account paying 4%. That is £800 of interest a year, all of it taxable.

• This tax year, at 40%: a £320 bill.
• From April 2027, at 44%: a £352 bill.

Moving that £20,000 into a cash ISA removes the bill either way. The point is that the bill it removes keeps growing, and the allowance that lets you remove it is still £20,000 rather than the smaller number people were braced for.

Rental profit is where the four points bite hardest, because property income has no equivalent of the Personal Savings Allowance sitting in front of it. A higher rate landlord with £12,000 of annual rental profit pays £4,800 on it this tax year at 40%. From April 2027, at 44%, the same profit costs £5,280.

The rent did not move. The rate did. That is £480 a year.

Those are our sums, on a stated 4% interest assumption and a flat profit figure, not Treasury numbers. Your own figures will differ, which is rather the point of running them.

If you let property, read the separation line twice

The rate rise is the headline, but the structural change underneath it matters more for anyone with rental income. Property income now has its own ladder of rates rather than borrowing the main ones. That is the sort of change that tends to get built on later.

For trusts, the same Annex A table gives a property basic rate of 24% and a property trust rate of 49% on accumulated and discretionary property income for the 2027 to 2028 year.

What the documents do not cover is worth saying out loud. Property held through a company, furnished holiday lets and jointly held property get no mention in section 3.9, in Annex A, or in either of the two HMRC policy papers published alongside the Budget. If your situation is one of those, the answer is not in these documents, and we are not going to invent one.

What Moola deliberately does not do here

Three things, and they are deliberate.

We do not tell you to move money. Moola will show you what the rate change does to your projection, and what a wrapper transfer would change. It will not tell you to sell a rental property or empty a savings account, because that decision rests on things a projection does not know: whether you need the cash in eighteen months, what your tenancy looks like, whether a sale triggers a gain.

We do not model a transfer as free. Moving £20,000 into an ISA uses this year's allowance, and often means selling something first. If a move has a cost or a consequence, it shows up in the plan rather than being quietly assumed away.

We do not model the new ISA incentive, because it does not exist yet. The Budget says the government "will now go further, working with the investment industry to explore a new ISA incentive for people investing in a stocks and shares ISA for the first time", and that "the detailed design will be developed with industry". No rate, no date, no eligibility rules. An incentive at the exploring stage is not a number, and we would rather hand you a plan with a gap in it than one built on a line in a press release.

Five months

6 April 2027 is roughly five months away. That is enough time for the things that have to happen inside a tax year.

1. Use this year's £20,000 if you have taxable interest and you were waiting to see whether the cash limit survived. It did.
2. Check whether your interest actually exceeds your allowance. A lot of people assume they are paying tax on savings when the £1,000 or the £500 covers all of it.
3. If you let property, re-run next year's profit at 44% rather than 40% and see whether the number still works at the rent you are charging.
4. Look at what your own plan assumes. If it was built on 20, 40 and 45, it is already two points out for this April and four points out for next.

Rates on earnings did not move this Budget. Rates on what your assets earn moved twice in two years, and the allowance that shelters them is unchanged. If your plan has one tax rate sitting quietly behind every projection, that is the assumption worth checking this weekend.

Moola runs the projection against your own figures rather than a worked example, including the tax on savings and property income. Nothing here is financial advice, and we are not financial advisers.

Where these figures come from

Every rate above is from the Budget 2026 document published on 28 October 2026, section 3.9, and from Annex A of the Overview of Tax Legislation and Rates. The savings and property rate changes are also set out in the HMRC policy paper "Income Tax: changes to tax rates for property and savings income", published 29 October 2026.