Saving with Glasgow Credit Union doesn’t just help you build financial security — it can also help you keep more of what you earn on your savings. One of the key benefits of certain savings products, like our Cash ISA, is the ability to save within your tax-free allowance.
What Is a Tax-Free Allowance?
The tax-free allowance refers to the amount of interest or dividends you can earn on your savings without paying any tax. In the UK, this is determined by two key elements:
1. Personal Savings Allowance (PSA)
This applies to standard savings accounts like your Glasgow Credit Union member savings account and is set by the UK government. For the tax year 2025/2026:
- Basic-rate taxpayers can earn up to £1,000 in interest tax-free
- Higher-rate taxpayers can earn up to £500
- Additional-rate taxpayers do not receive a PSA
2. ISA Allowance
This applies to tax-free savings products like Glasgow Credit Union’s Cash ISA:
- You can save up to £20,000 per tax year (correct for 2025/26)
- Any interest or dividends earned on a Cash ISA at any time remains tax-free
- ISA earnings do not count towards your Personal Savings Allowance
Why It Matters for Glasgow Credit Union Members
At Glasgow Credit Union , we offer:
- A Cash ISA for tax-free savings
- Dividend-bearing savings products like our Member Savings Account which includes our easy to use Savings Pots to help you save for any purpose.
By combining these options, you can:
- Maximise tax-free returns on your savings
- Protect more of your savings returns from tax
- Make informed choices about where and how to save
Example
Let’s say you’re a basic-rate taxpayer:
- You have a Glasgow Credit Union Member Savings Account earning dividends
- You also contribute into a Glasgow Credit Union Cash ISA
- Any dividends earned within the Cash ISA are automatically tax-free
- Dividends from your Member Savings Account are also tax-free — up to your £1,000 PSA
This structure helps you make the most of both allowances
Things to Keep in Mind
- ISA limits apply per tax year
- When you hold a Glasgow Credit Union Cash ISA you can only open and contribute to one Cash ISA per year
- Glasgow Credit Union dividends are not guaranteed but, ISA earnings always remain tax-free