The UK Personal Allowance — the amount you can earn before paying any income tax — is £12,570 for 2026/27. Simple in principle. In practice, it tapers at high incomes, has been frozen since 2021, and sits at the heart of the most surprising tax rate in the UK system: the 60% effective trap.
What the Personal Allowance is
Every UK taxpayer is entitled to a Personal Allowance — a chunk of earned income that is taxed at 0%. For the 2026/27 tax year (6 April 2026 to 5 April 2027), the standard Personal Allowance is £12,570.
If you earn £30,000 this tax year, you only pay income tax on £17,430 of it. If you earn exactly £12,570, you owe zero income tax (though you may still owe National Insurance).
| Your gross income | Taxable portion | Income tax due |
|---|---|---|
| £10,000 | £0 | £0 |
| £20,000 | £7,430 | £1,486 (20%) |
| £50,000 | £37,430 | £7,486 |
| £80,000 | £67,430 | £19,432 |
How the Personal Allowance tapers
Here is where the Personal Allowance stops being simple.
For every £2 you earn above £100,000, you lose £1 of Personal Allowance. The taper zone runs from £100,000 to £125,140. By the time your income hits £125,140, your Personal Allowance is zero — you pay tax on every penny you earn.
| Gross income | Personal Allowance remaining |
|---|---|
| Up to £100,000 | £12,570 (full) |
| £110,000 | £7,570 |
| £120,000 | £2,570 |
| £125,140+ | £0 (fully tapered) |
The 60% effective trap — the UK's highest marginal rate
Between £100,000 and £125,140, two things happen simultaneously to every £1 of extra earnings:
- It is taxed at the higher rate (40%)
- It causes you to lose 50p of Personal Allowance, which would have been tax-free — so you pay an additional 20p of tax on allowance you lost
Net effect: for every extra £1 earned in this zone, you keep 40p. That is a 60% effective marginal rate — higher than the 45% additional rate that applies above £125,140.
This is why some financial advisors recommend that earners in the £100k-£125k zone make large pension contributions. A pension contribution reduces your adjusted net income, restoring lost Personal Allowance and reducing your effective rate dramatically.
Why the Personal Allowance hasn't changed
The Personal Allowance was £12,570 in April 2021. Five years later, it is still £12,570. This is a political choice — successive Chancellors have frozen it to raise tax revenue without politically difficult rate increases.
The effect is called fiscal drag. As nominal wages rise with inflation, more workers are pulled into the taxable zone and a larger share of their earnings falls into higher bands, even though their real (inflation-adjusted) pay may be flat or falling.
HMRC data shows the number of taxpayers paying higher-rate tax has approximately doubled since 2010, overwhelmingly due to threshold freezes rather than real wage growth.
Special cases
Marriage Allowance
If one partner earns less than the Personal Allowance and the other is a basic-rate taxpayer (earning between £12,570 and £50,270), the lower earner can transfer up to 10% of their Personal Allowance (£1,260 for 2026/27) to their partner. This saves the couple up to £252 in tax per year. Apply via gov.uk/marriage-allowance.
Blind Person's Allowance
An additional £3,070 on top of the standard Personal Allowance (2026/27) for registered blind taxpayers. Can also be transferred to a spouse.
Scottish Personal Allowance
Scotland runs its own income tax bands, but the Personal Allowance is UK-wide — £12,570 applies equally. What differs in Scotland is which rates apply to income above the allowance (19%, 20%, 21%, 42%, 45%, 48% rather than the simpler 20/40/45).
Self-employed
The Personal Allowance works identically whether you are employed, self-employed, or both. If you have combined employment and self-employment income, your total counts toward the allowance and any taper.
How to see your own Personal Allowance impact
Our UK Income Tax Calculator shows the Personal Allowance applied to your specific salary, including taper calculations if you are above £100,000.
For a broader view, see:
- UK Tax Guide 2026/27 — how the Personal Allowance fits into the full tax system
- UK Salary & Cost of Living Calculator — see your take-home across 10 UK cities
Frequently asked questions
Will my Personal Allowance ever go up?
Yes, eventually. Government policy currently freezes the allowance until April 2028, with periodic reviews. Historically, the Personal Allowance has risen roughly in line with inflation over long periods, though not consistently year-to-year.
What if I earn less than the Personal Allowance?
You pay no income tax. You may still pay National Insurance if you earn above the NI threshold (£12,570 for 2026/27 — same as the Personal Allowance, since April 2022). You keep your full £12,570 allowance for potential transfer via Marriage Allowance.
Does my pension count toward the taper threshold?
Yes, taxable pension income counts. But pension contributions reduce your adjusted net income, which can pull you out of the taper zone. For someone earning £110,000, contributing £10,000 to a pension brings adjusted net income back to £100,000 and restores full Personal Allowance.
Can I claim an additional Personal Allowance if I'm over 65?
No. The age-related Personal Allowance was phased out in 2016. All taxpayers now use the same £12,570 allowance regardless of age.
Is the Personal Allowance the same as the tax-free threshold?
Yes — they are the same thing. "Personal Allowance" is the official HMRC term; "tax-free threshold" is the colloquial version. Both refer to £12,570 in 2026/27.
