2026/27: here’s what you need to know
The tax year reset on 6 April. Your ISA allowance is back to £20,000, your pension annual allowance is back to £60,000, and your capital gains tax exemption is back to £3,000. Everything starts fresh.
But this year isn’t just a simple reset. There are meaningful changes already in effect, bigger ones arriving in April 2027, and a window of opportunity that won’t stay open forever. Here’s what matters and what you can actually do about it.
Introducing the wiseones Take Home Pay Calculator
We’ve just launched wiseones.co.uk, and the Take Home Pay Calculator is one of the first tools on the site, built for the 2026/27 tax year from day one.
Every number in this article (the frozen thresholds, the NI rates, the pension rules, the student loan changes) ultimately feeds into one question: what do I actually take home?
That’s what this calculator answers. It’s not a rough estimate. It’s a full breakdown. Enter your salary and it calculates your income tax, National Insurance, pension contributions, and student loan repayments down to the penny, then shows you exactly where every pound of your gross pay goes in a visual stacked bar chart.
Here’s what it covers:
All 2026/27 tax rates and thresholds. The frozen personal allowance, the higher-rate band, the additional rate. All current from 6 April 2026.
England, Wales, Northern Ireland, and Scotland. Scottish taxpayers have six income tax bands with different rates. The calculator handles them all. One toggle.
Every pension type. Salary sacrifice, net pay, and relief at source, each one modelled correctly. Slide the contribution percentage and see what it actually costs your take-home pay versus the total landing in your pension. This is particularly important right now with the salary sacrifice NI cap arriving in 2029 (more on that below).
All five student loan plans. Plans 1, 2, 4, 5 (repaying for the first time this year), and postgraduate loans. If you’re repaying two at once, it handles that too.
Tax code parsing. Enter your actual HMRC tax code (1257L, BR, K codes, Scottish S codes) and it adjusts automatically.
No sign-up. No data stored. Just your numbers.
Try it here: wiseones Take Home Pay Calculator
This is just the start. As we grow through 2026, we’ll be adding more tools to help you plan your pensions, investments, and long-term finances. If you want to help shape what we build next, take our short survey and tell us what would be most useful to you.
Now, let’s get into what’s changing and why it matters.
The headline numbers haven’t changed, and that’s the problem
The personal allowance is still £12,570. The higher-rate threshold is still £50,270. The additional rate still kicks in at £125,140. These figures have been frozen since 2022, and they’re now confirmed frozen until at least April 2031, a full decade.
That might sound like stability. It isn’t. It’s a stealth tax rise. Wages go up with inflation, but the thresholds don’t move. So every year, more of your income is taxed at a higher rate. If you earned £48,000 in 2022, you were a basic-rate taxpayer. If your pay has risen with inflation to £52,000, you’re now paying 40% on part of your income, even though you’re no better off in real terms.
This is called fiscal drag, and it’s going to keep biting for another five years.
State Pension: up 4.8%, now dangerously close to the tax threshold
The triple lock has delivered again. The full new State Pension rises to £241.30 per week, that’s £12,548 a year. The basic State Pension (for those who reached State Pension age before April 2016) rises to £184.90 per week.
That new State Pension figure of £12,548 is now just £22 below the £12,570 personal allowance. If you have any other taxable income at all (a small private pension, some savings interest, a part-time job) you’ll be paying income tax on your State Pension income. And with the personal allowance frozen until 2031, the State Pension will almost certainly exceed it within the next year or two.
This is worth thinking about now, not when the tax bill arrives.
Pensions: the biggest changes in a generation are one year away
The real earthquake hits on 6 April 2027. That’s when the Finance Act 2026 brings unused pension funds into scope for Inheritance Tax.
Right now, if you die with money left in your pension, it typically passes to your beneficiaries outside of your estate. It’s one of the reasons pensions have been such a powerful planning tool: not just for retirement income, but for passing wealth to the next generation.
From April 2027, that changes. Most unused pension funds and death benefits will be included in the value of your estate for IHT purposes. If your total estate (now including your pension pot) exceeds the nil-rate band of £325,000 (or £500,000 with the residence nil-rate band), the excess could be taxed at 40%.
To put that in context: the average UK house price is around £300,000. Add a pension pot of even modest size, and suddenly you’re in IHT territory. The government estimates around 38,500 estates will pay more IHT than they would have under the old rules, with the average increase being around £34,000.
Death-in-service benefits remain outside IHT. Pensions passed to a surviving spouse or civil partner are also exempt. But for everyone else, particularly anyone who has been deliberately leaving their pension untouched as an estate-planning strategy, the landscape is fundamentally different.
This is your final year to prepare. The 2026/27 tax year is the last full year before these rules take effect. If you need to review your expression of wish forms, reconsider your drawdown strategy, explore gifting, or simply understand what your estate looks like with a pension included, the time to do it is now.
The Pensions Dashboard: it’s actually happening (probably)
The Pensions Dashboard has been promised since 2016. A decade later, it’s finally close to becoming real. The legal deadline for pension providers to connect to the dashboard ecosystem is 31 October 2026, and around 75% of workplace and personal pension records are already connected.
Public access is expected to follow roughly six months after that October deadline, so we’re realistically looking at spring 2027 before you’ll be able to log in and see all your pensions in one place.
When it does arrive, it will be genuinely useful. The UK has an estimated £31 billion in lost and forgotten pension pots. If you’ve had multiple jobs (and the average UK worker has nine over a lifetime), there’s a reasonable chance you have pension money sitting somewhere you’ve forgotten about. The dashboard will pull all of that together.
It won’t give you financial advice. It won’t tell you what to do. But it will give you visibility, and that’s the essential first step.
Salary sacrifice: use it or lose it (well, most of it)
If your employer offers salary sacrifice for pension contributions, pay attention. This is one of the most efficient ways to save for retirement because you avoid both income tax and National Insurance on the amount you sacrifice. Your employer saves NI too, and many pass some of that saving back into your pension.
From April 2029, this advantage is being capped. The first £2,000 of salary sacrifice per year will remain NI-free. Anything above that will be treated as earnings for National Insurance purposes, meaning both you and your employer will pay NI on the excess.
If you’re on a £50,000 salary sacrificing 6% into your pension, that’s £3,000 per year. Under the new rules, you’d pay NI on £1,000 of that. It’s not catastrophic, but it chips away at the efficiency. For higher earners sacrificing larger amounts, particularly those using it to stay below the £100,000 personal allowance threshold or avoid the high income child benefit charge, the impact is more significant.
The legislation has already passed through Parliament. This is happening.
The message is straightforward: you have three full tax years (2026/27, 2027/28, and 2028/29) to benefit from the current unlimited NI exemption on salary sacrifice. If you’ve been meaning to increase your pension contributions through salary sacrifice, or if your employer offers it and you haven’t set it up yet, this is the time.
Want to see what this looks like for your salary? The Take Home Pay Calculator lets you slide the pension contribution percentage and see exactly how much it costs your take-home versus how much lands in your pot. The ratio is often surprising.
Dividend tax: going up
If you hold investments outside of an ISA or pension, the tax on dividend income is increasing. Basic-rate taxpayers now pay 10.75% on dividends (up from 8.75%). Higher-rate taxpayers pay 35.75% (up from 33.75%). The additional rate stays at 39.35%.
The tax-free dividend allowance remains at just £500. This used to be £5,000 back in 2016/17. The direction of travel is clear.
If you’re a buy-and-hold investor with dividend-paying stocks outside a tax wrapper, this is another reason to think carefully about using your ISA and pension allowances first.
Capital Gains Tax: BADR rates rising again
The standard CGT rates haven’t changed: 10% for basic-rate taxpayers and 20% for higher-rate taxpayers on most assets, with 18% and 24% applying to residential property.
But if you’re a business owner planning to sell, the rate for Business Asset Disposal Relief (BADR) has risen again, from 14% to 18% as of 6 April 2026. That’s the third increase in three years (it was 10% until April 2025). The lifetime limit remains £1 million, but a qualifying gain of £1 million now costs £180,000 in CGT, compared to £100,000 just two years ago.
The CGT annual exemption stays at £3,000. It used to be £12,300. There’s a theme here.
ISAs: this year’s allowance is the last of its kind
The ISA allowance is still £20,000 for 2026/27. But from April 2027, the rules change. If you’re under 65, the maximum you can put into a Cash ISA drops to £12,000. The total ISA limit stays at £20,000, meaning you’d be able to split it as £12,000 cash and £8,000 stocks and shares, but no more than £12,000 in cash.
If you’re 65 or over, this restriction doesn’t apply.
This makes 2026/27 the last tax year where you can put the full £20,000 into a Cash ISA regardless of age. If you’re sitting on cash savings and want them inside a tax-free wrapper, this year is your window.
Crypto in ISAs: the door is closing
If you bought crypto ETNs inside a Stocks and Shares ISA since the FCA lifted the retail ban in October 2025, you should know that from 6 April 2026, that option has gone. Crypto ETNs are being reclassified as Innovative Finance ISA (IFISA) investments only.
In theory, you can still hold them in an IFISA. In practice, almost no mainstream platforms offer IFISAs that support crypto ETNs. None of the 57 currently authorised IFISA providers have plans to add them. So for all practical purposes, the tax-free ISA route for crypto is closed.
Existing holdings in a Stocks and Shares ISA purchased before the deadline can remain, but you can’t add new crypto ETN positions.
The alternative? SIPPs. Self-invested personal pensions have more flexibility around what counts as a qualifying investment, and several providers already allow crypto ETNs within a SIPP. More are expected to follow. If regulated crypto exposure matters to your long-term strategy, the pension wrapper is where it’s heading, though you should remember that means locking the money away until at least age 57 (from 2028).
Student loans: new thresholds and a brand new plan starts repaying
If you have a student loan, the repayment thresholds are changing from April 2026. The headline figures for the 2026/27 tax year are:
Plan 1 (started before September 2012 in England/Wales, or Northern Ireland): threshold rises to £26,065 per year, up from £25,245.
Plan 2 (England/Wales, started between September 2012 and July 2023): threshold rises to £29,385 per year, up from £28,470. But here’s the catch: the government has announced this threshold will then be frozen at £29,385 until April 2030. That’s four years of no increase. As wages rise and the threshold stays flat, more of your income sits above it each year, and your repayments quietly creep up. It’s fiscal drag applied to student loans.
Plan 4 (Scotland): threshold rises to £32,745 per year. Scottish borrowers continue to benefit from the highest threshold of any plan.
Plan 5 (England, started from August 2023 onwards): this is the big one. Plan 5 borrowers will make their first ever repayments from April 2026. The threshold is set at £25,000, the lowest of any undergraduate plan. If you started university in 2023 or later and have already entered the workforce, this is when deductions begin appearing on your payslip. Repayments are 9% of income above the threshold, and the loan is written off after 40 years (compared to 30 years under Plan 2).
Postgraduate loans (Plan 3): the threshold stays at £21,000. It has not changed since postgraduate loans were introduced in 2016. In real terms, it has fallen significantly. Repayments are 6% of income above the threshold, and if you also have an undergraduate loan, both deductions run at the same time.
A quick note for anyone using salary sacrifice: because student loan repayments are calculated on your gross pay (before tax and NI), salary sacrifice reduces the amount on which your student loan repayment is calculated too. If you’re on Plan 5 earning £30,000, sacrificing £2,000 into your pension would drop your assessable income to £28,000, reducing your annual student loan repayment from £450 to £270. The Take Home Pay Calculator models all of this together: tax, NI, pension, and every student loan plan in one view.
What else is changing
A few other things worth noting:
Working from home tax relief is gone. The income tax deduction for employees working from home who aren’t reimbursed by their employer has been scrapped for 2026/27. If you claimed this in previous years, it won’t be available going forward.
VCT relief is cut. Upfront income tax relief on Venture Capital Trust investments drops from 30% to 20%.
Council tax is going up almost everywhere. Most councils in England are raising rates by close to the 4.99% cap. Scotland and Wales are seeing similar or higher increases.
Making Tax Digital arrives for some. From 6 April 2026, self-employed individuals and landlords with gross income over £50,000 must keep digital records and submit quarterly updates to HMRC. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.
EIS and VCT qualifying thresholds increase. Companies can now have gross assets up to £30 million (previously £15 million) to qualify, widening the pool of investable businesses.
The bottom line
This financial year is a preparation year. The biggest changes (pensions in IHT, the cash ISA limit reduction, savings and rental income tax rises, the salary sacrifice NI cap) all land between April 2027 and April 2029. But the planning window is now.
Here’s what’s worth doing this year:
Use your ISA allowance. Especially if you want the full £20,000 in cash, this is the last year you can do that (if you’re under 65).
Review your pension. The IHT changes from April 2027 could affect your family. Check your expression of wish, understand your estate value with a pension included, and think about whether your drawdown strategy still makes sense.
Maximise salary sacrifice. The current NI exemption is unlimited. From 2029, it’s capped at £2,000. Three years of unrestricted NI savings is worth taking seriously. Model the impact on your take-home.
Use your CGT exemption. It’s only £3,000. If you have gains to realise, use it or lose it every year.
Keep an eye on the Pensions Dashboard. It’s coming. When it goes live, use it to find any pensions you’ve lost track of.
None of this is advice. It’s information, and knowing what’s changing puts you in a much stronger position to make decisions that work for you.
Here’s to a well-planned 2026/27.
wiseones provides financial guidance, not regulated financial advice. Tax treatment depends on your individual circumstances and may change in the future. If you’re unsure about any of the changes described here, consider speaking to a qualified financial adviser.