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REFERENCE · 2026/27 TAX YEAR

UK Tax Rates & Allowances 2026/27

Every number that matters for the 2026/27 tax year, on one page — income tax, National Insurance, ISAs, pensions, capital gains, dividends and the State Pension.

Last updated 17 June 2026 · Tax year runs 6 April 2026 to 5 April 2027 · Figures for England, Wales & Northern Ireland unless stated

The headline numbers

The allowances most people need, at a glance.

£12,570
Personal allowance (tax-free income)
£20,000
ISA allowance per person
£60,000
Pension annual allowance
£3,000
Capital gains tax-free amount
£500
Dividend allowance
£12,548
Full new State Pension (a year)

💷 Income tax bands

Rates for England, Wales & Northern Ireland. Scotland sets its own bands (see note below).

BandTaxable incomeRate
Personal allowanceUp to £12,5700%
Basic rate£12,571 – £50,27020%
Higher rate£50,271 – £125,14040%
Additional rateOver £125,14045%
Thresholds are frozen until at least April 2028. "Taxable income" is income above the personal allowance.
The 60% trap. Between £100,000 and £125,140, the personal allowance is withdrawn by £1 for every £2 earned. Combined with 40% tax, that means an effective marginal rate of about 60% on income in this band — the single biggest reason high earners pay into a pension or sacrifice salary.
Scotland is different. Scottish taxpayers have six bands (starter 19%, basic 20%, intermediate 21%, higher 42%, advanced 45%, top 48%) on non-savings income. Savings and dividend income still follow the UK-wide rates below.

🧾 National Insurance

Class 1 (employees) and Class 4 (self-employed) for 2026/27.

WhoEarnings / profitsRate
Employee (Class 1)£12,570 – £50,2708%
Employee (Class 1)Over £50,2702%
Self-employed (Class 4)£12,570 – £50,2706%
Self-employed (Class 4)Over £50,2702%
Employer (Class 1, secondary)Over £5,00015%
Class 2 is no longer compulsory; voluntary Class 2/Class 3 contributions can top up your State Pension record. Employer NI is charged above the £5,000 secondary threshold.
A typical employee on £30,000 pays 8% NI on earnings between £12,570 and £30,000. Once you cross £50,270, each extra £1 of salary carries 40% income tax + 2% NI = 42%.

🛡️ ISA allowances

Money inside an ISA grows and is withdrawn completely tax-free — no tax on interest, dividends or capital gains.

Account2026/27 allowanceNotes
Overall ISA allowance£20,000Per person, across all ISA types combined
Lifetime ISA (LISA)£4,000Counts within the £20,000; 25% bonus = up to £1,000/yr free
Junior ISA (JISA)£9,000Separate allowance, per child
The LISA bonus is paid by the government on contributions made before age 50; the LISA must be opened before age 40 and used for a first home or after age 60.
Coming April 2027. The overall ISA allowance is expected to stay at £20,000, but a lower sub-limit (around £12,000) for the cash portion has been announced. The stocks & shares allowance is unaffected. We'll update this page when the rules are confirmed.

🏦 Pension allowances

Pension contributions get tax relief at your marginal rate — a basic-rate taxpayer turns £80 into £100 in the pension; a higher-rate taxpayer effectively turns £60 into £100.

Allowance2026/27Notes
Annual allowance£60,000Or 100% of earnings if lower; includes employer contributions
Tapered annual allowancedown to £10,000Tapers if "adjusted income" > £260,000 (threshold income > £200,000)
Money Purchase Annual Allowance£10,000Applies once you flexibly access a defined-contribution pension
Tax relief20 / 40 / 45%At your highest rate of income tax
The Lifetime Allowance was abolished from 6 April 2024 and replaced by limits on tax-free lump sums (the Lump Sum Allowance, normally £268,275).

📈 Capital gains tax

Charged on the profit when you sell or gift assets — shares, funds, property (other than your main home) and so on.

ItemBasic-rate taxpayerHigher / additional
Annual exempt amount£3,000 (tax-free)
Shares & other assets18%24%
Residential property18%24%
Your gain is added on top of your income to decide which rate applies. Assets held inside an ISA or pension are exempt from CGT entirely.

💸 Dividend & savings tax

Dividends and interest earned outside an ISA or pension. Use your allowances first, then the rates apply.

Dividend taxRate
Allowance£500 tax-free
Basic rate8.75%
Higher rate33.75%
Additional rate39.35%
Savings interestTax-free
Personal savings allowance — basic rate£1,000
Personal savings allowance — higher rate£500
Additional rate£0
Starting rate for savingsup to £5,000*

*The £5,000 starting rate for savings tapers away as your non-savings income rises above the personal allowance, and is gone once it reaches £17,570.

👵 State Pension

Paid for life from State Pension age (currently 66, rising to 67 from 2028). Protected by the "triple lock".

TypePer weekPer year (approx.)
Full new State Pension£241.30£12,548
Full basic State Pension (pre-2016)£184.90£9,615
You need about 35 qualifying National Insurance years for the full new State Pension, and at least 10 to get anything. Check your forecast at gov.uk/check-state-pension.
The full new State Pension is worth roughly £313,000 if you tried to buy the same guaranteed, inflation-linked income yourself — effectively a hidden asset most people forget when working out their retirement number.

🧮 Put these numbers to work

Free calculators that use the 2026/27 figures above:

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For general information only — not financial or tax advice. Figures are for the 2026/27 UK tax year and may change at fiscal events. Tax treatment depends on your individual circumstances. Always check the current position at gov.uk or speak to a qualified, regulated adviser.

Sources: gov.uk — Income Tax rates, gov.uk — NI rates & thresholds 2026/27, gov.uk — Capital Gains Tax, HMRC, PLSA.

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