Your tax-free personal allowance will remain at £12,570 in 2026/27. The personal allowance is partially withdrawn if your income is over £100,000 and then fully withdrawn if your income is over £125,140.
Income tax rates and allowances
For 2026/27, the income tax thresholds are unchanged from 2025/26 and are set to remain static until 2030/31. The only rates that will increase from 6 April 2026 are the basic and higher tax rates on dividend income.
After your tax-free ‘personal allowance’ has been deducted, your remaining income will be taxed in bands in 2026/27 as follows:
| ‘Other income’ | Savings income | Dividend income | |||
|---|---|---|---|---|---|
| 2026/27 (and 2025/26) | 2026/27 | 2025/26 | |||
| Basic Rate | £1 – £37,700 | 20% | 20% | 10.75% | 8.75% |
| Higher Rate | £37,701 – £125,140 | 40% | 40% | 35.75% | 33.75% |
| Additional Rate | Over £125,140 | 45% | 45% | 39.35% | 39.35% |
‘Other income’ means income other than from savings or dividends. This includes salaries, bonuses, profits made by a sole trader or a partner in a business, rental income, pension income and various other income types.
Different rates of income tax apply to your ‘other income’ if you are classed as a ‘Scottish taxpayer’. The 2026/27 rates have not been released at the time this document was created.
From 6 April 2027, the government will create separate income tax rates for property income and will increase the income tax rates on savings income as follows:
| 2027/28 | |||
|---|---|---|---|
| Property income* | Savings income | ||
| Basic Rate | £1 – £37,700 | 22% | 22% |
| Higher Rate | £37,701 – £125,140 | 42% | 42% |
| Additional Rate | Over £125,140 | 47% | 47% |
*The new property income tax rates will apply to taxpayers in England and Northern Ireland. The Scottish and Welsh Governments will have powers to set property tax rates in those jurisdictions.
You will continue to be taxed at 0% within your personal savings allowance and dividend allowance. The savings allowance continues to be set at £1,000 for a basic rate taxpayer, £500 for a higher rate taxpayer and not offered to additional rate taxpayers. The dividend allowance continues to be set at £500.
December 8th, 2025
