Tax free savings allowance?

For basic rate taxpayers the tax free allowance on savings interest is £1000, however I have read somewhere that for lower earners, the allowance could be £5000. Can anyone confirm that and if correct what are the qualifying factors for the £5k allowance, thanks

Hi David H,

Customers can use their Personal Allowance to earn interest tax-free if they haven't used it up on wages, pension or other income. They may also get up to £5,000 of interest tax-free - this is the starting rate for savings. The more you earn from other income, the less your starting rate for savings will be.
Customers will not be eligible for the starting rate for savings if their other income is £17,570 or more in 2023-24- that's the Personal Allowance £12,570 + £5,000.
The starting rate for savings is a maximum of £5,000. Every £1 of other income above the Personal Allowance reduces the starting rate of savings by £1.
Example for 2023-24
Customer earns £16,000 of wages and gets £200 interest on savings. Personal Allowance £12,570 is used up by wages. The remaining wages £3,430 (£16,000 minus £12,570) reduces the starting rate for savings by £3,430. The remaining starting rate for savings is £1,570 (£5,000 minus £3,430). This is enough to cover the £200 interest so there is no tax to pay on this.

Thank you.

Hi i have a pension of £8500 per year. However I have interest on savings which will be more than the allowed £1000. Will this mean that i will have to pay tax on any interest i earn over the £1000. I would be grateful for any advice

Hi simon,
In addition to the £1000 Personal Savings Allowance, your remaining tax free allowances will also be applied, and you may also benefit from the £5000 starting rate for savings.
Find out more here -  Tax on savings interest
Thank you.