UK Personal Finance Wiki: Tax, NI, Pensions & Money Basics (2026/27)
A single-page reference for the UK's core personal finance numbers — Income Tax, National Insurance, student loans, pensions, savings, and more — for the 2026/27 tax year (6 April 2026 – 5 April 2027). Every figure below is a confirmed HMRC/government rate, not a forecast. Where a rule is frozen for several years (many are, until 2028–2030), that's noted so you know it won't quietly change next April.
Use it alongside the UK Take-Home Pay Calculator to see how these rates apply to your own salary.
Note on currency: tax and benefit rates change every tax year, usually announced in the Autumn Budget and effective from 6 April. Figures here are correct as of the 2026/27 tax year. Always cross-check against gov.uk before making financial decisions.
Contents
Income Tax
Applies in England, Wales and Northern Ireland. Scotland has its own bands — see below.
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
For a full walkthrough of tax codes, worked examples, and the £100k–£125,140 taper, see How UK Income Tax Works.
Personal Allowance taper: if your income exceeds £100,000, you lose £1 of Personal Allowance for every £2 earned above that, until it reaches £0 at £125,140 — creating an effective marginal rate of 60% between £100,000 and £125,140.
Frozen thresholds: the Personal Allowance and higher-rate threshold have been frozen since 2021/22 and remain frozen through 2026/27. Frozen thresholds pull more people into higher bands as wages rise — known as "fiscal drag."
Scottish Income Tax
Scottish residents pay Income Tax on these bands instead (Personal Allowance still £12,570, set UK-wide):
| Band | Taxable income | Rate |
|---|---|---|
| Starter rate | £12,571 – £16,537 | 19% |
| Basic rate | £16,538 – £29,526 | 20% |
| Intermediate rate | £29,527 – £43,662 | 21% |
| Higher rate | £43,663 – £75,000 | 42% |
| Advanced rate | £75,001 – £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
Scotland's starter and basic bands widened for 2026/27 (previously £12,571–£15,397 and £15,398–£27,491), so Scottish taxpayers keep slightly more at the lower end than the 2025/26 bands allowed. National Insurance is not devolved — Scottish employees pay the same NI rates as the rest of the UK.
National Insurance
Employee (Class 1):
| Threshold | Annual | Weekly | Rate |
|---|---|---|---|
| Primary Threshold | £12,570 | £242 | 0% below this |
| Primary Threshold → Upper Earnings Limit | £12,570 – £50,270 | £242 – £967 | 8% |
| Above Upper Earnings Limit | Over £50,270 | Over £967 | 2% |
Employer (Class 1 secondary): the Secondary Threshold is £5,000/year, and the rate is 15%. The Employment Allowance — which lets eligible employers offset employer NI — is £10,500/year, with no upper turnover limit on eligibility.
Student Loan Repayments
Repayments are 9% of income above the relevant threshold (6% for Postgraduate Loans), deducted automatically through payroll. Thresholds rose for 2026/27:
| Plan | Annual threshold | Rate |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate Loan | £21,000 | 6% |
If you have a Postgraduate Loan alongside an undergraduate plan, both repayments apply simultaneously on income above each respective threshold.
Not sure which plan you're on, or how interest and write-off timelines work? See the full Student Loan Repayment Guide.
Workplace Pensions
- Auto-enrolment minimum: 8% of qualifying earnings total, split at least 5% employee (including tax relief) / 3% employer.
- Qualifying earnings band: £6,240 – £50,270/year.
- Annual Allowance: £60,000/year — the most you can pay into pensions with tax relief before an annual allowance charge applies.
- Money Purchase Annual Allowance (MPAA): £10,000/year, applies once you start flexibly drawing a defined contribution pension.
- Tapered Annual Allowance: for high earners with "adjusted income" over £260,000, the Annual Allowance reduces by £1 for every £2 over that, down to a floor of £10,000.
- Lifetime Allowance: abolished from 6 April 2024. Replaced by the Lump Sum Allowance (£268,275) and Lump Sum and Death Benefit Allowance (£1,073,100), which cap tax-free lump sums rather than total pot size.
Pension contributions made via salary sacrifice reduce your pay before Income Tax, National Insurance, and student loan repayments are calculated — this is what the take-home pay calculator assumes by default. See Salary Sacrifice Pensions Explained for the full mechanics.
National Minimum & Living Wage
Rates from 1 April 2026:
| Category | Hourly rate |
|---|---|
| National Living Wage (21 and over) | £12.71 |
| 18–20 Year Old Rate | £10.85 |
| 16–17 Year Old Rate | £8.00 |
| Apprentice Rate | £8.00 |
The Apprentice Rate applies to apprentices under 19, or those 19+ in the first year of their apprenticeship. See the full National Minimum Wage Guide for enforcement, deductions, and the difference between this and the (voluntary) Real Living Wage.
ISAs & Savings Allowances
| Allowance | 2026/27 limit |
|---|---|
| Overall ISA allowance | £20,000 |
| Junior ISA | £9,000 |
| Lifetime ISA (LISA) | £4,000 (counts within the £20,000 total) |
| LISA government bonus | 25%, up to £1,000/year |
| Personal Savings Allowance (basic rate) | £1,000 |
| Personal Savings Allowance (higher rate) | £500 |
| Personal Savings Allowance (additional rate) | £0 |
LISA funds can be used toward a first home (up to £450,000) or withdrawn from age 60; withdrawing for any other reason before 60 incurs a 25% government penalty.
Dividend Tax
| Item | 2026/27 |
|---|---|
| Dividend Allowance (tax-free) | £500 |
| Basic rate | 10.75% |
| Higher rate | 35.75% |
| Additional rate | 39.35% |
Basic and higher-rate dividend tax rates both rose by 2 percentage points for 2026/27 (from 8.75% and 33.75%); the additional rate is unchanged. The Dividend Allowance itself has been cut sharply in recent years (from £2,000 in 2022/23 to £500 now), so dividend income is taxed much sooner than it used to be, on top of the higher rates.
Capital Gains Tax
| Item | 2026/27 |
|---|---|
| Annual Exempt Amount | £3,000 |
| Basic rate taxpayers | 18% |
| Higher/additional rate taxpayers | 24% |
| Business Asset Disposal Relief | 18% (up from 14%, effective 6 April 2026) |
Rates for most assets (shares, second properties, other chargeable gains) were unified at 18%/24% following the October 2024 Budget. Business Asset Disposal Relief — the reduced rate for qualifying business disposals, up to a £1 million lifetime limit — increased to 18% from 6 April 2026, closing more of the gap with the standard higher rate.
Inheritance Tax
| Item | Amount |
|---|---|
| Nil-rate band | £325,000 |
| Residence nil-rate band | £175,000 |
| Standard rate above threshold | 40% |
| Reduced rate (10%+ of estate left to charity) | 36% |
Both thresholds are frozen until April 2031. The residence nil-rate band tapers away for estates over £2 million (£1 lost for every £2 over). From April 2027, most unused pension funds and death benefits will be brought into the estate for Inheritance Tax purposes — a significant upcoming change for pension planning.
State Pension
| Item | 2026/27 |
|---|---|
| New State Pension (full) | £241.30/week (≈£12,548/year) |
| Basic State Pension (old system, full) | £184.90/week |
| Qualifying years for full new State Pension | 35 years |
| Minimum qualifying years for any State Pension | 10 years |
| State Pension age | 66 (rising to 67 by 2028) |
The State Pension rose 4.8% for 2026/27 under the "triple lock" (the highest of average earnings growth, CPI inflation, or 2.5%) — average earnings growth was the highest of the three this year. This is the first time the full new State Pension has passed £12,000/year. See National Insurance Explained for how qualifying years actually work.
Statutory Pay (Sick, Maternity, Paternity)
| Payment | 2026/27 rate |
|---|---|
| Statutory Sick Pay (SSP) | £123.25/week |
| Statutory Maternity Pay (after first 6 weeks) | Lower of £194.32/week or 90% of average weekly earnings |
| Statutory Paternity Pay | £194.32/week or 90% of average weekly earnings, if lower |
| Statutory Shared Parental Pay | £194.32/week or 90% of average weekly earnings, if lower |
| Lower Earnings Limit (entitlement threshold) | £129/week (£6,708/year) |
Statutory Maternity Pay pays 90% of average weekly earnings (uncapped) for the first 6 weeks, then the lower of the flat rate or 90% of earnings for up to 33 further weeks.
Child Benefit
| Item | 2026/27 rate |
|---|---|
| Eldest/only child | £27.05/week |
| Each additional child | £17.90/week |
High Income Child Benefit Charge (HICBC): applies if you or your partner has "adjusted net income" over £60,000. The charge is 1% of Child Benefit for every £200 of income between £60,000 and £80,000, becoming a full clawback at £80,000+. The charge is based on the higher earner's individual income, not joint household income.
VAT & Corporation Tax (quick reference)
Not personal tax, but relevant if you're self-employed or run a business — see the Self-Employed vs Employed Tax Guide for how these interact with personal tax:
| Item | Rate |
|---|---|
| VAT standard rate | 20% |
| VAT reduced rate | 5% |
| VAT zero rate | 0% |
| VAT registration threshold | £90,000 taxable turnover |
| Corporation Tax — small profits rate (profits ≤ £50,000) | 19% |
| Corporation Tax — main rate (profits ≥ £250,000) | 25% |
| Corporation Tax — marginal relief (£50,000 – £250,000) | Tapered between 19% and 25% |
FAQ
What is the UK Personal Allowance for 2026/27?
£12,570 — the amount you can earn before paying Income Tax. It's been frozen since 2021/22 and tapers to £0 for incomes between £100,000 and £125,140.
How much National Insurance do I pay in 2026/27?
8% on earnings between £12,570 and £50,270/year, and 2% on anything above £50,270 — unchanged from 2025/26.
What's the difference between Scottish and rUK Income Tax?
Scotland has six bands (19–48%) instead of three (20–45%), with lower earners paying slightly less and higher earners paying more compared with England, Wales and Northern Ireland. National Insurance is identical across the UK.
How much can I pay into an ISA in 2026/27?
£20,000 total across all adult ISA types (cash, stocks & shares, innovative finance, and Lifetime ISA combined) — unchanged from previous years.
What is the Inheritance Tax threshold?
£325,000 per person (nil-rate band), plus up to £175,000 more (residence nil-rate band) if a main home is left to direct descendants — effectively up to £500,000 per person, or £1 million for a couple. Both are frozen until April 2031.
How much is the State Pension in 2026/27?
£241.30/week (≈£12,548/year) for the full new State Pension, if you have 35 qualifying years of National Insurance contributions — a 4.8% rise on 2025/26 under the triple lock.
Is student loan repayment the same as a tax?
No — it's a separate deduction taken via payroll once you earn above your plan's threshold, at 9% (6% for Postgraduate Loans) of income above that threshold, and stops once the loan is repaid or written off.
Related pages
- How UK Income Tax Works — tax codes, worked examples, and the 60% tax trap explained in depth.
- UK Student Loan Repayment Guide — Plan 1, 2, 4, 5 and Postgraduate Loans compared, with interest and write-off timelines.
- National Insurance Explained — classes, qualifying years, and voluntary contributions.
- Salary Sacrifice Pensions Explained — how it works and why it beats relief-at-source.
- Self-Employed vs Employed Tax — what genuinely differs, beyond the headline NI rate.
- How Bonuses Are Taxed — why a bonus month looks so heavily taxed.
- National Minimum Wage Guide — rates by age, and how they differ from the Real Living Wage.
- UK Take-Home Pay Calculator — calculate your own exact take-home pay, plus a full breakdown for any salary from £10,000 to £250,000, for example £50,000 after tax.
This page is provided for general information only and does not constitute financial or tax advice. Rates and thresholds are reviewed annually by HM Treasury and can change. For your specific circumstances, consult HMRC directly or a qualified financial adviser. Last reviewed: 12 August 2026, against the confirmed 2026/27 tax year rates.