Here’s a handy guide to the key allowances you should know about:
Personal Allowance
Your personal allowance – the amount of income you can earn before paying income tax is £12,570 for most people this year. Income above this will be taxed at the usual rates.
ISA Allowance
You can put up to £20,000 into ISAs this tax year, tax-free. This can be spread across Cash ISAs and Stocks & Shares ISAs.
Looking ahead: From 6th April 2027, if you’re under 65, you’ll be able to add up to £12,000 per year into a Cash ISA (the overall ISA allowance stays at £20,000). If you want the rest of your allowance sheltered from tax, you’ll likely need a Stocks and Shares ISA or another non-cash ISA.
Pension Contributions
You can contribute up to £60,000 into your pension this year (or 100% of your earnings if lower) and benefit from tax relief. If you have a high income, tapering may apply, so double-check your limits.
Capital Gains Tax Allowance
You can earn up to £3,000 in capital gains this tax year before paying tax. This applies to profits from selling investments, second properties, or other assets.
Dividend Allowance
The tax-free dividend allowance remains £500. Dividends above this are taxed at the usual rates.
Marriage Allowance
If you’re married or in a civil partnership, you may be able to transfer up to £1,260 of your personal allowance to your partner, reducing their tax bill.
Why This Matters
Knowing your allowances at the start of the tax year means you can plan your savings, investments, and pension contributions wisely – potentially saving hundreds, or even thousands, in tax.
It’s also a great time to review your financial goals and make sure your money is working as hard as it can for you.
If you’d like help making the most of your allowances this year (and preparing for changes in the next), we’re here to help.