Last updated: 16 October 2026
What is the personal allowance for 2026/27?
The personal allowance is £12,570 for 2026/27. This is the amount of income most people can receive each tax year before paying income tax. It has been frozen since April 2021, and the November 2025 Budget extended the freeze to 5 April 2031. The higher rate threshold is also frozen at £50,270.
The £20,000 petition
An e-petition (number 702844) signed by about 250,000 people asked the government to raise the personal allowance from £12,570 to £20,000. MPs debated it in Westminster Hall on 12 May 2025. The Treasury minister said it would cost more than £50 billion a year and the government had no plans to do it. At that time, thresholds were due to start rising again from April 2028, but the November 2025 Budget extended the freeze to April 2031.
Income tax bands for 2026/27 (England, Wales and Northern Ireland)
| Band | Taxable income | Rate |
| Personal allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Scotland has its own bands and rates for non-savings income.
What is fiscal drag?
When wages and pensions rise but thresholds stay the same, more income is taxed and more people move into higher bands. This is fiscal drag. It raises billions for the Treasury each year without any change to tax rates. The full new State Pension is £241.30 a week in 2026/27, or about £12,548 a year, very close to the allowance. The government has said people whose only income is the State Pension should not have to pay small amounts of tax through Simple Assessment.
Losing the allowance above £100,000
Your personal allowance falls by £1 for every £2 of adjusted net income above £100,000, so it is gone at £125,140. Income in that band is taxed at an effective 60%. Pension contributions and Gift Aid donations reduce adjusted net income and can restore the allowance.
Example
Lucy earns £110,000. She loses £5,000 of her allowance. If she pays an extra £10,000 gross into her pension, her adjusted net income falls to £100,000, she gets the full allowance back and saves £6,000 in tax, plus the pension tax relief.
Other allowances that can help
- Marriage Allowance: transfer £1,260 of unused allowance to a spouse or civil partner who is a basic rate taxpayer, worth up to £252 a year
- Personal Savings Allowance: £1,000 for basic rate taxpayers and £500 for higher rate taxpayers
- Dividend allowance: £500
- Trading and property allowances: £1,000 each
- ISA allowance: £20,000 a year
Check your tax code
Most people with a personal allowance have the tax code 1257L. If your code is different, check why. A wrong code is one of the most common reasons for overpaying tax.
Frequently asked questions
Will the personal allowance go up in 2027?
No. It is frozen at £12,570 until April 2031 unless a future Budget changes this.
Do pensioners get a bigger allowance?
No. The age-related allowances ended in 2016.
Can I claim back tax if I earned less than £12,570?
Yes, if tax was deducted. You can claim a refund from HMRC.
Does the freeze apply in Scotland?
Yes, the personal allowance is UK-wide, though Scottish bands differ.
Related: transferring your allowance to a spouse, maximising your tax allowances and pensioners’ tax-free allowance.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with personal tax planning and refunds. See our tax refund accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
