Income tax thresholds remain frozen until April 2028
The Personal Allowance stays at £12,570 and the higher-rate threshold at £50,270, dragging more workers into higher tax bands through fiscal drift.
By Money Guide editorial team
Published:
Income tax bands and the Personal Allowance remain unchanged in 2026/27. The Personal Allowance is £12,570, the basic-rate threshold £50,270, and the additional-rate threshold £125,140.
The Office for Budget Responsibility has previously estimated that the freeze — first announced in 2021 and extended through 2027/28 — will pull around 4 million more people into income tax by the time it ends, and more than 3 million more into higher-rate tax.
For employees, the effect is steady: a pay rise that matches inflation no longer keeps pace with after-tax income, because more of each marginal pound of pay falls into a higher band. Pension contributions, salary sacrifice and Marriage Allowance claims become more valuable as the freeze runs on.
The Personal Savings Allowance (£1,000 basic-rate / £500 higher-rate / £0 additional-rate) and Dividend Allowance (£500) also remain unchanged.