Most people in the UK can earn some interest from their savings without having to pay tax. Here are the key allowances you need to know:

1. Personal Allowance: You can use your Personal Allowance to earn interest tax-free if you haven’t used it up on your wages, pension, or other income. The Personal Allowance amount varies each tax year.
2. Starting Rate for Savings: You may also get up to £5,000 of interest and not have to pay tax on it. However, the more you earn from other income (such as wages or pension), the less your starting rate for savings will be. If your other income is £17,570 or more, you’re not eligible for the starting rate for savings. If your other income is less than £17,570, your starting rate for savings is a maximum of £5,000.
3. Personal Savings Allowance (PSA): Depending on your Income Tax band, you may get up to £1,000 of interest without paying tax on it. Here’s how it works:
   • Basic rate taxpayers: Up to £1,000 of interest is tax-free.
   • Higher rate taxpayers: You have a reduced PSA of £500.
   • Additional rate taxpayers: Unfortunately, there’s no PSA for you.

Remember that savings in tax-free accounts like Individual Savings Accounts (ISAs) and some National Savings and Investments accounts do not count towards your allowance. If you go over your allowance, you’ll pay tax on any interest above it at your usual rate of Income Tax. HMRC will adjust your tax code or collect the tax through your annual tax return if needed.