UK Savers & Landlords Hit With Another Tax Shock: Your Interest & Rent Now Taxed at Up to 49% – Calculate Your Extra Bill Before April 2027

The Autumn Budget on 28 October 2026 has delivered a fresh blow to savers and property investors. From 6 April 2027 income tax rates on savings interest and rental profits will rise by a further two percentage points. Basic rate taxpayers will pay 24 percent, higher rate 44 percent and additional rate 49 percent.

Why the Change? Budget Context and OBR Forecasts

Global economic pressures and tight borrowing headroom prompted the Office for Budget Responsibility to highlight the need for additional revenue. The Chancellor described the measure as offering breathing space for the public finances while avoiding further increases on earned income. This follows last year’s similar adjustment and forms part of a targeted approach to unearned income streams.

The OBR projections indicate modest additional yield from these adjustments without derailing growth forecasts. International comparisons show the UK maintaining competitive employment tax rates while addressing fiscal gaps through investment income.

Who Is Affected and Who Is Protected

The increases apply solely to savings income and property income.

  • Individuals receiving bank or building society interest
  • Landlords reporting rental profits after allowable expenses

Those unaffected include employees whose pay remains taxed at standard rates, dividend recipients and individuals realising gains under main capital gains tax thresholds. Pension drawdowns and certain trading income may also fall outside the immediate scope depending on individual circumstances.

Real-World Examples: How Much Extra Will You Pay?

Consider a basic rate saver earning £5,000 in interest. At the new 24 percent rate the tax bill rises by £100 compared with the previous band. A higher rate saver with the same £5,000 faces an additional £100 at 44 percent.

A higher rate landlord reporting £20,000 net rental profit will pay £400 more. An additional rate landlord with £50,000 rental profit faces an extra £1,000 annually.

  • Basic rate saver, £10,000 interest: extra £200
  • Higher rate landlord, £15,000 profit: extra £300
  • Additional rate investor, £30,000 combined income: extra £600

Use our interactive tax calculator now to model your personal exposure and generate precise figures for 2027/28.

Practical Steps to Reduce Your Tax Bill

Maximise ISA contributions before the new rates apply. The annual allowance remains available for cash and stocks & shares ISAs. Consider pension contributions to lower taxable income where appropriate.

Landlords should review expense claims including repairs, interest costs under current rules and professional fees. Accurate record keeping before 6 April 2027 will support higher deductions.

Timing matters. Accelerating allowable expenditure or reviewing investment structures now can limit the impact. Explore our embedded tax calculator to test different scenarios and identify the most effective actions.

Forward Planning for 2027/28 and Beyond

The new Pensions Tax Allowance and increased Trading Allowance may interact with these changes. Modelling multiple scenarios today helps identify opportunities such as reallocating assets into tax efficient wrappers or adjusting rental portfolios.

Retirees, side income earners and property investors should review their position immediately. Early planning provides clarity and avoids rushed decisions after the rates take effect.

The cumulative effect on unearned income warrants careful attention. While the government emphasises fiscal breathing space, individuals can still take measured steps to protect their position. Try the calculator today and build a personalised plan ahead of April 2027.