Last updated: 4 November 2026. Figures for the 2026/27 tax year (6 April 2026 to 5 April 2027). England, Wales and Northern Ireland unless stated.
Most people in the UK can earn a chunk of money every year without paying any income tax on it. That chunk is called the Personal Allowance, and for 2026/27 it’s £12,570.
It sounds simple, but there’s more to it than one number. The allowance can shrink if you earn over £100,000, you can sometimes share part of it with your partner, and it sits alongside other tax-free allowances for savings and dividends. This guide explains it all in plain English.
What is the Personal Allowance?
The Personal Allowance is the amount of income you can have each tax year before you start paying income tax. For 2026/27, GOV.UK lists it as £12,570.
It covers most kinds of taxable income added together, including:
- Wages and salary
- Self-employed profits
- Pensions (including the State Pension)
- Rental income
- Some benefits, such as Carer’s Allowance and Jobseeker’s Allowance
The tax year runs from 6 April to 5 April, so your allowance resets every April.
Frozen until 2031: the Personal Allowance and the higher rate threshold have been frozen since 2021, and the government has said they’ll stay frozen until April 2031. As wages rise, more of your income ends up taxed. This is often called fiscal drag. My fiscal drag calculator shows how it affects you.
Income tax bands for 2026/27
Once your income goes over the Personal Allowance, you pay tax on the rest in bands:
| Band | Taxable income | Tax 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% |
Source: GOV.UK. Assumes you get the standard Personal Allowance.
You only pay the higher rate on the part of your income inside that band, not all of it. Going over £50,270 doesn’t mean all your pay gets taxed at 40%.
A simple example
Say you earn £35,000 a year in England and have the standard allowance:
- The first £12,570 is tax-free
- The remaining £22,430 is taxed at 20%, which is £4,486
You’d also pay National Insurance, which has its own thresholds. My 50/30/20 budget by salary shows what different salaries look like after tax.
Scotland is different
If you’re a Scottish taxpayer, you get the same £12,570 Personal Allowance, but Scotland sets its own bands and rates for income from work, pensions and property, with more bands (starter, basic, intermediate, higher, advanced and top rates). Check the Scottish rates on GOV.UK. Tax on savings and dividends follows UK rules wherever you live.
The £100,000 tax trap: how the allowance is tapered
This is the part that catches people out. If your adjusted net income goes over £100,000, your Personal Allowance is reduced by £1 for every £2 over that limit.
That means:
- At £100,000, you still get the full £12,570
- At £110,000, you lose £5,000 of allowance, so you get £7,570
- At £125,140 or more, your Personal Allowance is zero
For employment income in England, Wales and Northern Ireland, losing allowance while paying 40% tax creates an effective 60% marginal income tax rate between £100,000 and £125,140 (plus 2% employee National Insurance where applicable). Scotland has different rates. If you have children under the free childcare age, crossing £100,000 can also mean losing free childcare hours and Tax-Free Childcare, which can cost thousands more.
The good news is you can often bring your adjusted net income back under £100,000, most commonly by paying more into a pension. Salary sacrifice works especially well.
My guides go into this in detail:
What is “adjusted net income”?
It’s the figure HMRC uses for the taper (and for the High Income Child Benefit Charge). Roughly, it’s your total taxable income, minus things like:
- Pension contributions paid through relief at source (the grossed-up amount)
- Gift Aid donations (grossed up)
- Trading losses
Salary sacrifice reduces your salary before tax, so it lowers your adjusted net income automatically.
Can I share my Personal Allowance?
Marriage Allowance
If you’re married or in a civil partnership and one of you earns less than the Personal Allowance, they can transfer £1,260 of their allowance to the other. That can save the couple up to £252 a year.
It only works if:
- The lower earner has income under £12,570, and
- The higher earner is a basic rate taxpayer (not higher or additional rate)
You can backdate a claim for up to four previous tax years. My Marriage Allowance calculator shows what you could get back.
Blind Person’s Allowance
If you’re registered blind or severely sight impaired, you can get Blind Person’s Allowance on top of your Personal Allowance. Check GOV.UK for this year’s amount.
Other tax-free allowances to know
Your Personal Allowance isn’t the only tax-free amount. These sit alongside it:
| Allowance | 2026/27 amount | What it covers |
|---|---|---|
| Personal Savings Allowance | £1,000 (basic rate), £500 (higher rate), £0 (additional rate) | Interest on savings outside ISAs |
| Starting rate for savings | Up to £5,000 | Savings interest, if your other income is low |
| Dividend allowance | £500 | Dividends from shares outside ISAs and pensions |
| Trading allowance | £1,000 | Small amounts of self-employed or side-hustle income |
| Property allowance | £1,000 | Small amounts of property income (e.g. renting a driveway) |
| ISA allowance | £20,000 | Money paid into ISAs; interest and growth are tax-free |
Check GOV.UK for the latest rules, as some of these have conditions.
If you’re earning a bit on the side, my guide to side hustle tax explains when you need to tell HMRC.
How the Personal Allowance shows up in your tax code
Your employer or pension provider uses your tax code to give you your allowance through the year. The standard code for 2026/27 is 1257L: the number is your allowance with the last digit removed, and “L” means you get the standard tax-free allowance.
If your code is different, it might be because of company benefits, a second job, underpaid tax from a previous year, or the Marriage Allowance. My guide on how to check your tax code explains what each letter means and what to do if it looks wrong.
Personal Allowance: people also ask
What is the Personal Allowance for 2026/27?
£12,570. It’s the amount of income most people can have in the tax year before paying income tax.
How much can I earn before paying tax in the UK?
Usually £12,570 a year, or about £1,047 a month. You may also pay National Insurance once you earn over its own threshold.
At what income do you lose your Personal Allowance?
It starts reducing once your adjusted net income goes over £100,000, by £1 for every £2 over. It’s gone completely at £125,140.
Is the Personal Allowance going up?
No. The government has frozen it at £12,570 until April 2031.
Do pensioners get a higher Personal Allowance?
No. Everyone gets the same £12,570. The State Pension counts as taxable income, so if you have other income too, you may pay tax.
Can I transfer my Personal Allowance to my husband or wife?
You can transfer £1,260 of it through the Marriage Allowance, if you earn less than £12,570 and your partner is a basic rate taxpayer.
Summary
- The Personal Allowance is £12,570 for 2026/27 and is frozen until 2031.
- Basic rate 20% to £50,270, higher rate 40% to £125,140, additional rate 45% above.
- Over £100,000, you lose £1 of allowance for every £2 you earn, creating a 60% tax trap. Pension contributions can help.
- Check your tax code is right and whether you can claim the Marriage Allowance.
Next step: check your tax code with my tax code guide, or see if you’re owed money in my tax refund guide.
General information only, not tax advice. If your situation is complicated, speak to HMRC or a qualified adviser.
Sources (checked 4 November 2026): GOV.UK: Income Tax rates and Personal Allowances · GOV.UK: income over £100,000 · GOV.UK: Marriage Allowance · GOV.UK: tax on savings interest · GOV.UK: Scottish income tax