Tax year 2026/27: the key changes to know
Most headline allowances are frozen again for 2026/27, so more people are pulled into higher tax bands as wages rise. Here's what that means for your pay, savings and investments.
By Money Guide editorial team
Published:
The 2026/27 tax year keeps the major personal allowances frozen. The Personal Allowance remains £12,570 and the higher-rate threshold £50,270 — both held since April 2021 and currently due to stay frozen until April 2028. As wages rise against static thresholds, 'fiscal drag' pulls more people into paying tax, and into the higher-rate band, without any headline rate going up.
On savings and investments, the ISA allowance stays at £20,000, but the Capital Gains Tax annual exempt amount is just £3,000 and the dividend allowance £500 — both far below where they stood a few years ago. That makes ISAs and pensions more valuable as shelters, and means more people with taxable investments now need to report gains.
For households, the practical steps are unchanged but more important: use your ISA allowance before the 5 April deadline, check whether you can claim higher-rate pension tax relief, and review whether salary sacrifice or pension contributions can keep you below a threshold such as the £100,000 point where the Personal Allowance starts to taper.
Always check the live figures on gov.uk, as thresholds and allowances can change at fiscal events such as the Budget.