What is the Personal Allowance?
The personal allowance is the amount you can earn each year before paying any income tax — £12,570 in 2026/27, frozen at that level since 2021 and due to stay frozen until 2030/31.
How the personal allowance works
Almost everyone gets the same allowance: the first £12,570 of income each tax year is tax-free, whether it comes from wages, pensions or self-employment. Above £100,000 it is withdrawn at £1 for every £2 of extra income — creating a hidden 60% marginal tax rate between £100,000 and £125,140, where the allowance disappears entirely. Married couples and civil partners can transfer 10% of an unused allowance (£1,260) to a basic-rate partner via the Marriage Allowance, worth up to £252 a year.
The freeze — the biggest tax rise you never voted on
The allowance rose steadily through the 2010s (from £6,475 in 2010 to £12,500 by 2019) — then was frozen at £12,570 in April 2021, a freeze since extended to 2030/31. With wages rising, a frozen allowance quietly pulls millions of low earners into tax and existing taxpayers into higher bands. That mechanism — fiscal drag — is forecast by the OBR to create several million extra taxpayers by the end of the decade, and means the full new state pension (£11,973) is now within £600 of being taxable by itself.
Why it matters now
The allowance sits at the centre of the parties' tax argument: Reform UK would raise it to £20,000 (about £1,486 a year for most workers — the most expensive pledge of this Parliament), while the Conservatives' Triple Lock Plus would give pensioners a higher allowance that rises with the state pension. Labour keeps the freeze. See what each plan does to your pay with the take-home pay calculator.
Plain-English guide for general information only — not financial, legal or tax advice. Rates are 2026/27 unless stated. Last reviewed 5 July 2026.
Frequently asked questions
What is the personal allowance for 2026/27?
£12,570 — the same as every year since 2021. It's frozen until 2030/31, so rising wages mean more of your income is taxed each year even though the headline rates haven't changed.
Why do I lose my personal allowance over £100,000?
Above £100,000 of income you lose £1 of allowance for every £2 earned, until it's gone at £125,140. Combined with 40% tax, that creates an effective 60% marginal rate in that band — pension contributions are the standard way to avoid it.
Which party would raise the personal allowance?
Reform UK proposes raising it to £20,000 (worth about £1,486 a year to most workers), though the party describes the exact figure as an aspiration. The Conservatives' Triple Lock Plus would raise it for pensioners only, in line with the triple lock.