Last updated: 18 October 2026
Understanding individual tax changes in personal allowance is essential for anyone managing their personal finances in the UK. The personal allowance is the amount of income you can receive each tax year before you start paying income tax.
For 2026/27 the standard personal allowance stays frozen at £12,570, while several other allowances have risen with inflation. This guide sets out the 2026/27 figures and explains what they mean for your take-home pay, savings and financial planning.
Allowances for 2026/27 are
- Personal allowance: £12,570
- Income limit for the personal allowance: £100,000 (the allowance falls by £1 for every £2 of income above this, so it is lost completely at £125,140)
- Minimum married couple’s allowance*: £4,530
- Maximum married couple’s allowance*: £11,700
- Income limit for married couple’s allowance: £39,200
- Blind person’s allowance: £3,250
- Marriage allowance (transferable amount): £1,260
- Dividend allowance: £500
*Married couple’s allowance is only available where at least one partner was born before 6 April 1935. It reduces your tax bill by 10% of the allowance, so by up to £1,170 for 2026/27. The higher-age personal allowances for people born before 6 April 1948 ended in 2016/17; everyone now gets the same standard allowance.
Married Couple Allowance
Married couples and civil partners who are not entitled to married couple’s allowance can use the marriage allowance instead. It lets one partner transfer up to £1,260 of their allowance to their spouse, saving the couple up to £252 a year. The transfer only works if the partner receiving it is a basic rate taxpayer and the partner giving it earns less than the personal allowance. Claims can be backdated for up to four tax years.
Tax Rates and Thresholds
The income tax bands for 2026/27 in England, Wales and Northern Ireland, applied to income above your personal allowance, are:
- Basic rate (20%): £0 to £37,700
- Higher rate (40%): £37,701 to £125,140
- Additional rate (45%): above £125,140
With the standard personal allowance, that means you pay higher rate tax on income above £50,270. Scotland has its own six income tax bands for earned income.
Interest Relief
You can claim tax relief on interest paid on certain qualifying loans, for example a loan used to buy shares in, or lend money to, a close company in which you have a material interest, an employee-controlled company or a partnership in which you are a partner.
This tax relief is subject to the cap on income tax reliefs, which limits the total of certain reliefs you can claim to the greater of £50,000 and 25% of your adjusted total income for the year.
State Pension Age
The State Pension age is 66 for men and women. It is rising to 67 in stages between 2026 and 2028, starting with people born on or after 6 April 1960. Under current law it will rise to 68 between 2044 and 2046, and the government keeps this timetable under review.
The full new State Pension is £241.30 a week for 2026/27. You normally need 35 qualifying years of National Insurance to get the full amount, and at least 10 qualifying years to get anything.
NI Contributions Over SPA
Once you reach State Pension age, you stop paying employee’s Class 1 National Insurance on your earnings, and self-employed people stop paying Class 4 from the following tax year. You still pay income tax on income above your personal allowance, including the State Pension itself.
If you have gaps in your record, you can usually pay voluntary Class 3 contributions, at £18.40 a week for 2026/27, to fill gaps from the last six tax years.
ISAs
The tax-free ISA limits for 2026/27 are:
- Overall ISA allowance, across stocks and shares, cash ISA, innovative finance and Lifetime ISAs: £20,000
- Cash only ISA: up to the full £20,000 for 2026/27. From 6 April 2027, people under 65 will only be able to put up to £12,000 a year into cash ISAs.
- Lifetime ISA: £4,000, counted within the £20,000
- Junior ISA and Child Trust Fund: £9,000
Last Words
In conclusion, understanding individual tax changes in personal allowance is key to effective financial planning. With the personal allowance and tax bands frozen, more of your income is pulled into tax each year as wages rise.
Staying up to date helps you plan better, use every allowance you are entitled to and avoid paying more tax than you need to. A little time spent checking your position can make a big difference in the long run.
Disclaimer: The information about individual tax changes in personal allowance in this article, including text and graphics, is general in nature and does not replace professional advice.
