31/03/2026
As we begin the new tax year, we would like to highlight a few financial changes that may affect household income, pensions and savings over time. While there are no major headline announcements, some gradual adjustments could have an impact on personal budgets.
Income tax thresholds remain frozen
The personal tax-free allowance remains at £12,570, and higher-rate tax thresholds have also stayed the same.
As pensions or wages increase, this may mean some people pay slightly more tax or move into a higher tax band - even if their income has only risen modestly.
More pensioners paying income tax
The State Pension increases each year, but the tax-free allowance is not rising at the same pace. As a result, some pensioners may begin paying income tax in the coming years. It is always advisable to check your tax code occasionally to ensure it is correct.
Changes for self-employed individuals
From April 2026, many self-employed people and landlords will need to follow new Making Tax Digital rules. This will involve keeping digital records and submitting quarterly updates to HMRC rather than completing one annual tax return. Preparing in advance can help make the transition smoother.
Savings and investments
Allowances for dividends and capital gains are lower than in previous years, meaning some people may pay tax on savings or investment income sooner than before. Reviewing how savings are organised, including making full use of ISA allowances, may help improve tax efficiency.
These changes are gradual, but they may influence take-home income and longer-term financial planning. If you are unsure how they affect you, consider speaking with a trusted financial adviser or family member.
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