Overview
- - The Personal Allowance stays at £12,570 for 2026/27, with HMRC setting out this year’s savings rules and the DWP confirming people whose only income is the full State Pension will not pay income tax this year or next.
- - From April 2027, the tax-free allowance must be used on employment, self-employment and pensions before any property income, savings interest or dividends, which pushes more of that asset income into taxable bands.
- - The same year brings higher charges on asset income, with property and savings taxed at 22% for basic-rate and 42% for higher-rate payers, dividend rates rising by two points for most, a cut to the cash ISA limit for under‑65s to £12,000, and residual pension pots becoming liable to inheritance tax.
- - Examples from accountants show the new allocation rule can add about £182 to an annual bill within a £614 total rise, and another worked case suggests roughly £676 more for a worker with rental, savings and dividend income.
- - HMRC will collect more tax on interest by adjusting tax codes as banks report what customers earn, though reliefs such as the Personal Savings Allowance, the starting rate for savings and the £7,500 Rent‑a‑Room scheme can still shield income.