What is the Personal Allowance for 2026/27?

The Personal Allowance for 2026/27 is £12,570. This is the amount you can earn before paying any income tax. The allowance has been frozen at this level since 2021/22 and is expected to remain frozen until at least April 2028.

Do I lose my Personal Allowance if I earn over £100,000?

Yes. Your Personal Allowance is reduced by £1 for every £2 of income above £100,000. This means it's fully removed at £125,140 income. In the £100,000-£125,140 band, your effective marginal tax rate is 60% because you're losing allowance plus paying 40% tax.

Does everyone get the Personal Allowance?

Most UK residents get the full £12,570 Personal Allowance. However, it's reduced or removed if: you earn over £100,000, you're a non-resident with no UK income, or you've transferred part of it to your spouse via Marriage Allowance. Children, students, and pensioners all get the same allowance.

Can I transfer my Personal Allowance to my spouse?

You can transfer £1,260 of your Personal Allowance to your spouse or civil partner through Marriage Allowance. This saves the recipient up to £252 per year in tax. To qualify, the transferrer must earn under £12,570 and the recipient must be a basic rate taxpayer (earning under £50,270).

Is the Personal Allowance going up in 2027?

The Personal Allowance is currently frozen at £12,570 until at least April 2028. After that, it may increase with inflation, but this depends on government policy at the time. The freeze means more people pay tax as wages rise — this is called fiscal drag.

Personal Allowance 2026/27 — How Much Can You Earn Tax-Free? | PocketWise

The Personal Allowance is the amount you can earn each year without paying income tax. For 2026/27, it’s £12,570.

Personal Allowance 2026/27 — The Basics

Fact	Detail
Amount	£12,570 per year
Monthly equivalent	£1,047.50
Weekly equivalent	£241.73
Daily equivalent	£34.44

Everyone gets the same Personal Allowance regardless of age, employment status, or whether you’re working or retired.

What Counts as Income Against Your Personal Allowance?

Counts Towards Allowance	Doesn’t Use Your Allowance
Employment salary	ISA interest and gains
Self-employment profits	Premium Bond prizes
Pension income	Personal Savings Allowance (up to £1,000)
State Pension	Dividend Allowance (first £500)
Rental income	Lottery winnings
Taxable benefits	Most state benefits (UC, PIP, etc.)
Interest above PSA	Capital gains (has separate allowance)

How the Personal Allowance Saves Tax

Example: £30,000 Salary

Without Personal Allowance	With Personal Allowance
£30,000 taxed at 20% = £6,000	£30,000 - £12,570 = £17,430 taxable
	£17,430 × 20% = £3,486
Tax saved by Personal Allowance	£2,514

The £100,000 Personal Allowance Reduction

Your Personal Allowance is reduced if your adjusted net income exceeds £100,000.

How the Reduction Works

Income	Personal Allowance	Tax on £100k+ Band
Up to £100,000	£12,570	40%
£100,001	£12,569.50	60% effective
£105,000	£10,070	60% effective
£110,000	£7,570	60% effective
£115,000	£5,070	60% effective
£120,000	£2,570	60% effective
£125,140	£0	45%
£130,000+	£0	45%

Why the Effective Rate Is 60%

For every £2 you earn above £100,000, you lose £1 of Personal Allowance. Here’s what happens:

Earn Extra £1,000	Calculation	Tax Impact
Regular 40% tax	£1,000 × 40%	£400
Lost allowance (£500) taxed at 40%	£500 × 40%	£200
Total tax on extra £1,000		£600 (60%)

Example: £110,000 Salary

Step	Calculation
Income over £100,000	£110,000 - £100,000 = £10,000
Allowance reduction	£10,000 ÷ 2 = £5,000 less
Remaining allowance	£12,570 - £5,000 = £7,570
Taxable income	£110,000 - £7,570 = £102,430

How to Restore Your Personal Allowance

If you earn slightly over £100,000, these strategies can reduce your adjusted net income to restore your allowance:

Strategy 1: Pension Contributions

Gross Pension Contribution	Adjusted Net Income	Personal Allowance
£0	£110,000	£7,570
£5,000	£105,000	£10,070
£10,000	£100,000	£12,570 (full)

Every £1 in pension contributions above the £100k threshold has an effective value of £1.67 due to restored allowance.

Strategy 2: Salary Sacrifice

Same effect as pension contributions — your gross salary is reduced before tax.

Strategy 3: Gift Aid Donations

Gift Aid donations extend your basic rate band and reduce adjusted net income.

Strategy 4: Spread Income Across Tax Years

If possible, defer bonuses or income to a year when you’re under £100,000.

Which Strategy Works Best?

Strategy	Best For
Pension contributions	Building retirement savings (most common)
Salary sacrifice	Also reducing NI
Gift Aid	If you’re charitable anyway
Deferring income	Self-employed or bonus-heavy compensation

If one partner earns under £12,570 and the other is a basic rate taxpayer, you can transfer £1,260 of the lower earner’s Personal Allowance to the higher earner.

Marriage Allowance Details

Item	Amount
Amount transferred	£1,260 (10% of Personal Allowance)
Tax saving	Up to £252/year
Transferrer’s new allowance	£11,310
Recipient’s new allowance	£12,570 + £1,260 = £13,830

Who Can Claim?

Requirement	Detail
Relationship	Married or civil partnered
Transferrer income	Under £12,570
Recipient income	Basic rate taxpayer (under £50,270)
Recipient location	Cannot be Scottish at higher rate

How to Apply

Apply online at gov.uk/marriage-allowance
Provide National Insurance numbers for both
HMRC adjusts tax codes automatically
Can backdate up to 4 years (claim up to £1,008)

If you’re registered blind (or severely sight impaired), you get an extra allowance:

Tax Year	Blind Person’s Allowance	Total with PA
2026/27	£3,070	£15,640

This can also be transferred to a spouse if you can’t use it all.

Personal Allowance for Non-Residents

Situation	Personal Allowance?
UK resident	Full £12,570
Non-resident British citizen	Yes (or reduced if income over £100k)
Non-resident EU/EEA citizen	Yes
Non-resident with UK employment	Usually yes
Non-resident with only UK rental income	Usually yes, but check your tax treaty
Non-resident, country without tax treaty	Possibly no

Common Questions by Situation

Students

Question	Answer
Do students get Personal Allowance?	Yes — full £12,570
Part-time work while studying	Tax-free up to £12,570
Summer job earnings	Counts towards annual allowance
Student loan	Not a tax — separate repayment

Pensioners

Question	Answer
Personal Allowance at 65+?	Same £12,570 (age-related allowances abolished 2016)
State Pension taxable?	Yes — uses your Personal Allowance
Private pension taxable?	Yes — uses your Personal Allowance
Tax code on pension?	Usually includes remaining allowance after State Pension

Multiple Jobs

Question	Answer
Two jobs — two allowances?	No — one £12,570 allowance total
How is it split?	Usually all to main job, second job taxed from £1
Can I split it?	Yes — contact HMRC to divide between jobs
What if main job is under £12,570?	Remaining allowance applied to second job

Self-Employed

Question	Answer
Same allowance as employed?	Yes — £12,570
When is it applied?	On your Self Assessment
Trading Allowance separate?	Yes — additional £1,000 before Personal Allowance

Personal Allowance History

Tax Year	Personal Allowance	Change
2026/27	£12,570	Frozen
2025/26	£12,570	Frozen
2024/25	£12,570	Frozen
2023/24	£12,570	Frozen
2022/23	£12,570	Frozen
2021/22	£12,570	+£70
2020/21	£12,500	+£650
2019/20	£12,500	+£650
2018/19	£11,850	+£350
2017/18	£11,500	+£500

The freeze from 2021/22 to 2027/28 (at least) is estimated to bring millions more people into paying income tax and push existing taxpayers into higher bands.

Tax Codes and Personal Allowance

Your tax code shows how much Personal Allowance you’re receiving:

Tax Code	Meaning	Personal Allowance
1257L	Standard	£12,570
1131L	Marriage Allowance transferrer	£11,310
1383L	Marriage Allowance recipient	£13,830
1564L	Blind Person’s Allowance	£15,640
BR	Basic Rate (no allowance)	£0 (second job)
D0	40% on all earnings	£0
D1	45% on all earnings	£0
NT	No tax	£0 (but tax-free)
K	Negative allowance (owe from benefits)	Reduces pay

Fiscal Drag — The Hidden Tax Rise

Because the Personal Allowance is frozen while wages increase with inflation:

Impact	Effect
More people pay tax	Those earning near £12,570 get pushed over
More people pay higher rate	Those near £50,270 get pushed into 40%
Real allowance value falls	£12,570 buys less each year
Effective tax rise	Without changing headline rates

Example: Wages Rising 5%

Year	Salary	After 5% Rise	Extra Tax from Threshold Freeze
2024	£12,000	£12,600	Now pays tax: £6
2024	£50,000	£52,500	Extra 40% on £2,230: £892
2024	£100,000	£105,000	Loses £2,500 allowance: +£1,000