What changed in UK personal finance this tax year

The UK tax year starts on 6 April. By the time the new year is a few weeks old, most people want to know one thing: what's actually different? This is a short comparison of the headline figures year-on-year, sourced from HMRC and gov.uk publications, with the changes worth noticing flagged.

It's an evergreen guide we refresh each April. The current edition covers the move from 2026/27 to 2026/27.

What's frozen (and therefore quietly rising in real terms)

The phrase you'll hear most around tax policy in the UK right now is "fiscal drag" — the effect of leaving tax thresholds unchanged while wages and prices keep rising. Inflation pushes people into higher tax bands without rates ever formally going up.

The frozen-since-2021 items, still frozen for 2026/27:

• Personal allowance — £12,570
• Basic-rate threshold — £50,270
• Higher-rate threshold — £125,140
• NI primary threshold — £12,570 (aligned with personal allowance)
• Inheritance Tax nil-rate band — £325,000
• Residence Nil-Rate Band — £175,000

These were originally frozen to 2026 and then extended to 2028 in the 2022 Autumn Statement. Every year they stay still, the effective tax burden ticks up.

The 2024–25 cuts to other allowances are now bedded in — and remain frozen at the lower levels:

• CGT annual exempt amount — £3,000 (was £12,300 in 2022/23)
• Dividend allowance — £500 (was £2,000 in 2022/23)

The ISA and pension framework figures also unchanged:

• ISA annual allowance — £20,000
• Lifetime ISA annual cap — £4,000 (with the £450,000 property cap)
• Junior ISA allowance — £9,000
• Pension annual allowance — £60,000
• MPAA — £10,000
• Tapered annual allowance — kicks in above £260,000 adjusted income, floors at £10,000

What actually changed

The figures most likely to update each April:

State Pension uprating

The State Pension is uprated under the triple lock — by the highest of CPI inflation, average earnings growth, or 2.5%. The exact April 2026 increase will have followed the September 2025 CPI release. The full new State Pension figure should be checked on gov.uk for the current year.

Student loan thresholds

Plan 1, Plan 2 and Plan 4 thresholds are typically reviewed annually. Plan 5 (England, courses from August 2023) is frozen at £25,000 until April 2027. The Postgrad threshold is also frozen at £21,000. Check the HMRC student loan repayment guide for the current Plan 1/2/4 figures.

Universal Credit and other benefits

The work allowance and standard allowances are uprated by inflation each April, following the previous September's CPI figure. If your situation involves means-tested benefits, the official rates pages are the only authoritative source.

Mortgage market rates

Not a tax change, but worth noting: rates move continuously, not annually. Where they sit at the start of a new tax year often shapes whether borrowing or saving is the better marginal use of cash. Track the Bank of England base rate directly and check aggregators like Moneyfacts for current fixed-mortgage offers.

What was already changed before April

Some of the most consequential adjustments don't land neatly on 6 April. A few from recent years to remember:

• Capital Gains Tax rates were unified on 30 October 2024 — both residential property and other assets now use 18% in the basic-rate band and 24% above.
• SDLT first-time buyer relief thresholds reverted on 1 April 2025 — 0% to £300,000, 5% on the slice to £500,000, no relief above £500k.
• SDLT additional-property surcharge increased to 5% (from 3%) on 31 October 2024.
• The Lifetime Allowance was abolished on 6 April 2024 and replaced by the Lump Sum Allowance (£268,275) and Lump Sum and Death Benefit Allowance (£1,073,100).

These haven't moved further this tax year, but they're the biggest changes to be aware of if you last looked at the rules pre-2024.

What's already announced for future tax years

A few items dated in advance:

• The frozen income tax bands and personal allowance are due to thaw from April 2028, when normal uprating is currently scheduled to resume. (This date has been pushed back twice before.)
• The minimum pension access age rises from 55 to 57 from 6 April 2028.
• Plan 5 student loan threshold freeze ends in April 2027.

These are the items where it's worth checking nearer the time — chancellors revisit them in autumn budgets.

The quick checklist for the new tax year

If you do nothing else after a tax-year change, the five questions worth running through:

1. Have I confirmed my tax code is right? Check your HMRC personal tax account. Wrong codes are common after pay rises, benefits changes or starting/ending side-income.
2. Am I using this year's ISA allowance the way I intend to? £20,000 doesn't roll over.
3. Has my employer's pension scheme contribution rate changed? Sometimes nominal pay rises mask reductions in match terms.
4. Are any frozen items now affecting me where they didn't before? Pay rises can push you into higher tax bands; the £100k personal allowance taper catches more people every year.
5. Have I checked the tax-year-end checklist? Some allowances make more sense to use early in the year rather than rushing in March.

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Last updated 22 May 2026 for the 2026/27 tax year. Figures are from HMRC, ONS and gov.uk and current at the time of writing. Tax rules can change between updates — confirm on gov.uk before acting. This article is educational and is not personal financial advice. See our disclaimer.